Germany argued against a joint backstop for struggling euro-area banks as European finance ministers renewed their debate on how to handle the costs of managing failed lenders.
Read more: Germany Digs In Against Risk Sharing in EU Bank-Failure Plan - SFGate
German Finance Minister Wolfgang Schaeuble called on his colleagues to rein in their ambitions for the Single Resolution Mechanism proposed by the European Commission, which includes a common fund filled by levies on the financial industry. While an agreement is unlikely today, it can be achieved by year-end as long as among European Union member states don’t insist on a joint fund immediately, he said.
“It’s not disputed in principle that we need a European fund,” Schaeuble told reporters yesterday at the start of two days of talks in Brussels. “A fund needs a levy” on banks, “but the levy needs a clear legal basis. There are different opinions on that, but if you want a safe legal basis, you’d better take the safe route.”
Finance ministers are racing to meet a year-end deadline to reach a common position on the bank-failure plan so that a final agreement on the legislation with the European Parliament is possible before the assembly stops work before elections in May. The European Central Bank, which takes over euro-area financial supervision next year, wants a European resolution mechanism in place as soon as possible after it begins oversight.
Read more: Germany Digs In Against Risk Sharing in EU Bank-Failure Plan - SFGate
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