On September 22, the new ISDA 2014 definitions for credit default swap contracts came into effect. Included in the definitions was a new credit event - "governmental intervention."This credit event covers government intervention to expropriate the subordinated debt of a failing bank (as the Dutch government did with SNS Bank in 2013) and the conversion or write-off of subordinated debt as required under Basel III.This makes CDS contracts - written under the 2014 definitions over bank subordinated debt - much more valuable to a buyer than contracts written under the earlier 2013 definitions. As a result, a clear difference in the pricing of the CDS contracts has emerged.Markit reported last week that the difference for five year contracts written on UBS and Credit Suisse subordinated debt was an average of 200 per cent. 2014 definition contracts were marked at an average 197 basis points, while the 2003 definition contracts averaged 65 bps.Little difference was observed in the pricing of senior debt CDS. At the moment it seems that the market is pricing-in little risk of senior debt bail-ins.This was confirmed by Markit data for the four major Australian banks at the time. The average gap between five year CDS written under 2003 and 2014 definitions was just 2 bps, with the former being priced around 50 bps.Given the uncertainty that remains around the bailing-in of senior debt, a four percentage point premium for protection over five years seems like good value.As for the pricing of the Basel III compliant, Tier 2 subordinated debt of the four majors: 2003 definition CDS were marked at 73 bps, while 2014 definition CDS were marked around 120 bps - a premium of a mere 64 per cent.Interestingly, no prices were quoted for protection of Additional Tier 1 exposure to the four major banks. Clearly, there is little or no institutional investor interest.