"If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?'. If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders."
---Jeroen Dijsselbloem, Dutch finance minister
"In a normal market economy an investor always has a risk of losing money. That's why I think it's fair and right, and also part of a normal market economy, that owners of a bank, investors, and biggest depositors - who can be seen as investors - take their own responsibility, in one way or another."
-- Jyrki Katainen, Finnish prime minister
So the Dutchman with the unspellable name, who is currently the head of the committee of eurozone finance ministers, has announced that no bank in the eurozone, no matter how important, is TBTF. How this must warm the hearts of the Righteous. “We told those Levantines: No more of our good clean Protestant money will go toward paying for your sinful ways. Let your dirty depositors pay.” You know how good it feels for them to say that.
It has been interesting watching the northerners writhe in agony as they have had to write checks to the peripherals. Every time they have rescued a bankrupt bank, they have said “This is the last time: from now on, creditors and depositors will contribute.” But until now they never actually allowed that to happen. Now, not only do we see the junior creditors of Bankia being hit, we also see depositors in the big Cypriot banks being whacked. A breakthrough.