From Bloomberg:
Uninsured deposits could be used in future bank failures provided global rulemakers agree on a common approach, according to Federico Ghizzoni, the chief executive officer of Italy’s biggest lender, UniCredit SpA. (UCG)*Actually we know. They are the corporate successors to Credit Anstalt.
Cutting large deposits in failing banks, along with other liabilities such as bonds, to offset losses is acceptable as long as small savers’ funds remain protected, Ghizzoni told reporters in Vienna late yesterday. The European Union has to introduce identical rules in all of its member states and ideally those rules would be coordinated globally, he said.
Including deposits “is acceptable if it becomes a European solution,” said Ghizzoni, 57. “What we cannot accept is differentiation country by country inside the same area. I would strongly suggest to make this decision not only within Europe but within the Basel Committee, where all countries are represented. Otherwise we would open the market for arbitrage."...MORE
I kid you not. They should have been strangled at birth.
See "Creditanstalt Redux?: Failure to save East Europe will lead to worldwide meltdown":
Creditanstalt failed in May 1931. From Kindleberger's "World in Depression: 1929-1939":
In 1929, the Bodenkreditanstalt was fused overnight with the Creditanstalt. The Bodenkreditanstalt brought to the Creditanstalt large loans to industrial concerns which could be maintained only by the device of ignoring market values...Hmmm, sounds familiar.
Unicredit now owns Creditanstalt.
After the rescue of the bankrupt corpus and a couple mergers CA became part of Italy's Unicredit in 2006.
