Burning senior bondholders not necessarily bad

THROUGHOUT this “world’s cheapest bank bailout”, which has cost the Irish taxpayer mere dozens of billions to date, one policy of the Government has remained absolutely constant.

This is the policy that says that, under no circumstances, can the senior bondholders of Irish banks be burned, scorched, or even lightly toasted.

The phrase “burning the bondholders” has become code word for a policy whereby the senior bondholders, people who invested in the Irish banks in exchange for a return which, while low, was certainly and above that which they would have received had they lent to the Government, would be required to see their investment partially written off.