Last year saw a mad rush by Western governments, especially in the Eurozone, to pass bail-in legislation before the end of 2015. And while the European Central Bank has done its part in attempting to buy every single toxic debt that was on the books of European banks, it hasn't been enough to satisfy the trillions in loans made to subsidize the oil industry, emerging markets, or artificial bubbles in sectors like housing.
And it appears that these new laws came none too soon as on April 10, Austria invoked their bail-in procedure and will initiate a debt haircut on senior creditors for a failed bank that was nationalized six years ago.
Today, the Austrian Financial Market Authority (FMA) in its function as the resolution authority pursuant to the Bank Recovery and Resolution Act (BaSAG - Bundesgesetz über die Sanierung und Abwicklung von Banken) has issued the key features for the further steps for the resolution of HETA ASSET RESOLUTION AG. The most significant measures are:
•a 53.98% bail-in, resulting in a 46.02% quota, for all eligible preferential liabilities,
•the cancellation of all interest payments from 01.03.2015, when HETA was placed into resolution pursuant to BaSAG,
•as well as a harmonisation of the maturities of all eligible liabilities to 31.12.2023. - Examiner