Government backs down on burning bondholders

THE Government has backed down on its pre-election posturing to strong-arm senior bondholders to take losses and help pay for the banking bailout.

It said in order to keep the new banking pillars, built on the structures of Bank of Ireland and AIB, viable these opaque investors would be protected.

Public Expenditure Minister Brendan Howlin said the matter had been raised at European level to seek support for this approach which would have minimised the cost to taxpayers. But this did not find favour.