Yet the idea that taxpayers should bail out senior creditors of massively insolvent banks at such risk to the solvency of their state is both unfair and unreasonable.
Uncertainty about how senior creditors of systemically important banks will be treated in the absence of a bailout is also affecting credit-rating outlooks for big banks.
With the new system, regulators will have stronger powers to force senior creditors and even large depositors to take losses before public money is used.