Date: 30th July 2018

In June 2018 the ECON committee of the European Parliament published a study titled “Subordinated Debt and Self-placement: Mis-selling of Financial Products”. After five years of very diverse interpretations and applications of so-called “burden sharing” in bank recovery and resolution, also known as bail-in of subordinated bank creditors, the European Parliament’s ECON Committee examined whether subordinated bonds were sold to the general public as a consequence of weak and ineffective regulations (MiFID). It found that, on the contrary, such selling practices were in fact in breach of MiFID rules, which therefore qualifies such practices as mis-selling and entitles the wronged retail bondholders to compensation.