Analysis: Contingent-capital plan could split the industry

08/30/2010 | Reuters

Major banks could benefit from a plan to make hybrid-bond holders bear the burden if a bank should run into problems. The Basel Committee on Banking Supervision has proposed that bondholders and shareholders take a hit if a bank is on the verge of collapse and must be rescued. However, insiders said the move could polarize the market and reinforce a two-tier banking market.

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