BRUSSELS--Comments by Jeroen Dijsselbloem, head of the Eurogroup of euro-zone finance ministers, were not intended to say that the Cypriot bank bail-in agreed by ministers last night should be a model for the future, his spokeswoman said Monday.
In an interview with Reuters and the Financial Times Monday, Mr. Dijsselbloem said the losses suffered by uninsured depositors in Cyprus as part of its rescue package may have to be repeated elsewhere. The comments led to a sharp drop on some European stock markets and pushed the single currency lower.
"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 recapitalize yourself?'," Mr. Dijsselbloem said hours after the Cypriot deal was reached.
"If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalizing the bank, and if necessary the uninsured deposit holders."
Asked about the comments, Mr. Dijsselbloem's spokeswoman sought to backtrack on the way the comments were interpreted.
"He didn't say it was a template or should be a template," the spokeswoman said. "With banks in countries in trouble, you shouldn't automatically go to the taxpayers but see what the banks themselves can contribute.'
Although his comments represent a sharp shift in rhetoric by euro-zone officials, who have preferred to emphasize the strengthening of the euro zone's institutional defenses over the last year, they repeat basic principles that have been used in previous bail-outs: notably, that shareholders and creditors should first bear the cost of resolving failed banks. They differ mainly in the explicit reference to the 'bailing-in' of uninsured depositors.
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