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Before It Breaks

Somebody Has to Take the Loss

Resolution is the question of who, decided in advance, by rule — or at four in the morning, by whoever is in the room.

11 min135 XP available4 challenges

Put these in order

Put the creditor hierarchy in order, from who loses first to who loses last.

Earliest cause at the top

  1. Deposits above the insured limit

  2. Senior unsecured bondholders

  3. Insured deposits

    Protected, and paid by the scheme if it comes to it

  4. Additional tier 1 instruments

    Designed to convert or be written down

  5. Subordinated debt

  6. Shareholders

    Wiped out before anyone else loses a cent

Answer to continue.