Profit from bonds was not ‘huge’
I FEEL compelled to address some of the glaring inaccuracies and misguided comparisons made by Declan Doyle (Letters, September 23).
In the first instance, bank bondholders did not make “huge profits” as a result of investing in “previously profitable Irish banks”.
Bonds are by design higher in the capital structure than equity and as such returns are limited to periodic interest income plus return of capital. Unlike stocks, they do not enjoy the theoretically unlimited economic upside of corporate profitability; conversely, they should have less downside.