How the ECB wants to help risky bank bonds

Heard on the Street: Volatility and higher costs for these bonds today are the price that ensures they will do their job in future crises

Investors have very short memories when central banks offer comfort.

Junior bank debt has rallied sharply since Mario Draghi, European Central Bank president, lent his support last week. UBS this week sold the first so-called additional Tier 1 capital bonds since mid-January, attracting bids for more than five-times the size of the deal.

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