EU close to finalising plans for the future of bank failures
12 Dec, 2013
The EU is one step closer to finalising a plan to stop a repeat of bailouts funded by the taxpayer.
Bank failures have had a huge influence on the Eurozone financial crisis in Spain, the Republic of Ireland and Cyprus.
All the ministers from the EU have agreed that the task of bailing out a bank in trouble should fall on investors and creditors not the taxpayer
For the new plan to go ahead, powers will need to be given to a new EU agency.
The plan is still to be agreed by the European Parliament, so plans are not yet finalised nor is it known what effect it will have on London.
According to the BBC, French Finance Minister Pierre Moscovici said: “We have made great progress… we are 95% of the way there.”
A Single Resolution Mechanism will be part of the plan, and is to be settled over the next 10 years. It will be a joint pot of money, of up to £46 billion.
The SRM will ensure banks from all over Europe have advanced recovery plans ready.
Picture: Credited to Tupungato – Shutterstock