New EU state aid guidance may force insurers to adjust capital structure
Lawyers split on whether subordinated debt will be made convertible by law
New guidance issued by the European Commission (EC) on state bail-outs could force ‘too big to fail' insurers to change their capital structure, according to some legal experts.
The commission's updated guidance on the application of state aid rules, published on July 10, lays down the conditions under which European member states are allowed to use taxpayers' money to bail out struggling insurers and banks.
The guidelines outline the minimum requirements for burden-sharing between creditors and
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