That’s the worry as Ireland says it has asked the IMF to allow it to impose losses on senior debt holders in Anglo Irish Bank.
The Irish bailout was done under the assumption that senior debt-holders would be protected while subordinated debt-holders would get the shaft. Now the rules are changing in the middle of the game. That destabilizes everything and makes investors all the more convinced that Greece will eventually (and inevitably) be allowed to default.
Throw in Greek political chaos as the PM offers to step down to form a unity government and you have a really unsettled European backdrop.
Risk off, one and all…
