On claims of depositors, subordinated and creditors and central banks in bank resolutions

Regarding Cyprus, recently I heard someone claim that depositors are not creditors of a bank despite the fact that deposits are bank liabilities. This is bollocks. Depositors are indeed creditors, particularly in Europe where they are often legally pari passu with other unsecured creditors. Below is an extract from a presentation given by an ECB expert on bank resolution schemes addressing who gets preferential treatment in carving up the losses. The full PDF is linked below.
I think this is highly relevant to what is occurring in Cyprus

Depositor preference rule.
So, the first topic I would like to address is the debate surrounding the introduction of a depositor preference rule in insolvency. As you know, a depositor preference rule requires that in the insolvency of a bank the claims o...


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