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Wed Mar 27, 2013, 02:38 AM Mar 2013

Dijsselbloem Says Euro Troubled Lenders Must Fend for Themselves

Dutch Finance Minister Jeroen Dijsselbloem, who committed taxpayer funds to take over SNS Reaal NV (SR) last month, said troubled lenders in the euro area must now fend for themselves as part of future regional rescues.

Dijsselbloem, who leads the group of 17 euro finance ministers, said imposing losses on depositors and bondholders can be part of the bailout toolkit after such measures were taken to avoid default in Cyprus.

“We are looking for a way to place risks where they are taken,” Dijsselbloem said on Dutch television program “Pauw & Witteman” late yesterday. “Banks should strengthen their balances -- they have to ensure they can be unwound when they get in trouble. Next, it should be possible to make shareholders and bond holders contribute to a rescue. That’s how we move along. And then eventually you may get to a government contribution. That order was reversed in the last years.”

Dijsselbloem said earlier yesterday that if ailing banks can’t raise funds, “then we’ll talk to the shareholders and the bondholders, we’ll ask them to contribute in recapitalizing the bank, and if necessary the uninsured deposit holders.” Those comments, to Reuters and the Financial Times, were confirmed yesterday by Dijsselbloem’s spokeswoman, Simone Boitelle.


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