A bail in may transform depositors’ money into equity, but it does not transform depositors into investors.

And, by giving bailed-in depositors «investor» status (and hence control of the bank), it gives control to a group of newly created shareholders that face a set of incentives that work against the benefit of the bank.

Investors seek to benefit from equity value; bailed-in depositors want to recover as much as they can from their bailed-in deposits.

This, from WSJ’s Moneybeat