EU Commissioner Pushes for Fast Banking Union
The European Union must clarify "rules of the game" regarding help for Europe's ailing banks, and accelerate the creation of a mechanism to either help them or wind them up, EU Economic Affairs Commissioner Ollie Rehn said in a interview published Friday by three European newspapers.
"I think it's important that, as there is still some uncertainty on rules of the game concerning resolution and bail-in, that we clarify these rules now," Rehn told the Wall Street Journal Europe, the German newspaper Die Welt and the Dutch daily NRC Handelsblad.
Rehn spoke to the newspapers ahead of an informal meeting on Friday of eurozone finance ministers in Dublin, where help for Cyprus to deal with its banking sector crisis is high on the agenda.
The EU official pointed to an EU project that foresees a progression of aid for ailing banks, first from investors and creditors, known as a bail-in, followed by help from the host country, and as a last resort, from the European Stability Mechanism, a rescue fund, with the latter two representing bail-outs.
Rehn pointed to Spain as a "reference point" for how to help banks, and underscored that a European banking union should be set up by 2015.
Such a union has been agreed to in principle, but some components have not been finalized yet, including the role of non-insured bank account holders, typically those with more than 100,000 euros ($131,000) on deposit.
Some EU officials argue that they should only be included in a bail-in if bank shareholders and creditors such as bondholders are unable to cover the amount of funds needed.