MILAN (Reuters) - The head of the European Banking Authority said on Thursday the fact that retail investors in Europe held large amounts of bank debt posed a challenge to the effectives of rules aimed at shielding taxpayers from the cost of bank rescues.
"This is what I call the 'retail challenge' to banks' resolvability," Andrea Enria said in a speech delivered in Milan.
Even if banks stopped placing debt with retail investors now, by 2021 the current stock of retail holdings would still be one third of its current level.
"In a nutshell, the amortization profile of the existing stock is such that the retail challenge is bound to last for a while," he said.