European Union Economic and Monetary Affairs Commissioner Olli Rehn said he’s working to resolve disputes in how the bloc’s crisis fund can be used to recapitalize struggling banks in the region.
“It seems there have been different interpretations about the June decision,” he said in an interview yesterday in Haemeenlinna, Finland. “Already this week the member states have begun to discuss with the help of the European Commission on what exact rules could be implemented in bank recapitalization. This work proceeds in parallel to the work on the banking supervisor.”
Disagreement erupted after finance chiefs from Germany, the Netherlands and Finland signaled a retreat from a June agreement among European leaders allowing the euro area’s bailout fund to recapitalize banks. The Sept. 25 statement by Wolfgang Schaeuble, Jutta Urpilainen and Jan Kees de Jager excluded “legacy assets” from the region’s rescue facility.
Finland wants to confine direct recapitalization by the rescue fund to cover bank bailouts that occur after a single financial supervisor is created, Urpilainen said. While it was possible that some states had “differing expectations,” there was “no conflict because the possibility of direct bank recapitalization is explicitly tied to the existence of a single bank supervisor,” she said.
Read more: EU Working to Resolve Difference on Bank Plan, Rehn Says - Bloomberg
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