Italy senior bonds in line for losses

Italy is set to put senior unsecured bank bonds in line for losses with a law that facilitates writedowns to prevent taxpayer bailouts.

The treasury in Rome will soon amend the order in which a failed lender’s capital will be written off, giving corporate and bank deposits preference over senior bonds, according to a new law implementing the EU’s Bank Recovery and Resolution Directive.

Senior bonds would be wiped out right after equity and subordinated debt, according to the law.