Bail-in can potentially lead to enhanced market discipline and lower use of public finances only if its application is credible and stringent. This requires that the holders of bail-in able debt have the capacity of absorbing losses but also that the application of bail-in does is consistent with financial stability. Sophisticated investors have typically a larger financial capacity than unsophisticated investors but they are also more reactive to information and/or imposition of losses and are therefore more likely to generate runs and systemic risk. In contrast, retail investors are slower movers and as such they constitute a more stable source of funding. As a result, we do not advocate the ban of the sale of subordinated debt to retail investors. Rather, it is crucial that the rules concerning the marketing of these products are appropriately designed and their implementation is supervised by competent authorities.