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Ring-fencing helps bail-in
DEBT investors face more risk as the new rules restructuring lenders will make it easier for regulators to make investors pay for a bank failure, Moody’s said yesterday.
When banks are ring-fenced into retail and investment arms, they will “be less complex and easier to resolve, thereby lowering the barrier to regulatory resolution that could entail bail-in”.
But that may also make it more expensive to issue bonds.