ECB hints at shift on bondholder policy

An ECB source has said the Frankfurt-based institution would like to see senior bondholders included in the restructuring of banks as part of the EU bailout of the Spanish banking system.

But European Commission spokesman Simon O’Connor said senior bondholders will not be included in private sector involvement as part of the restructure.

The treatment of senior bondholders in Spain has huge implications for the Government in negotiations with the troika on the restructuring of Irish bank debt. Irish taxpayers shouldered the full burden of paying off the senior debt owed by the banks.