EU parliament gives final nod to banking union

EU Observer ^ | 16.04.14 @ 09:21 | Valentina Pop

[Olog-hai]

MEPs on Tuesday (15 April) overwhelmingly approved the creation of a new authority and fund for failing banks—a missing element to the so-called banking union aimed at minimizing the public cost of future financial crises.

The final vote on the creation of a €55 billion fund financed by the banks themselves passed with 570 MEPs in favor, 88 against and 13 abstentions, while new rules in cases where public money needs to be used for winding down banks also gathered a similar majority: 584 votes in favor, 80 against and 10 abstentions.

One key concession won by MEPs from governments during final negotiations was a speedier mutualization of the fund, which will comprise of domestic bank levies paid into “national compartments”. Forty percent of the fund is to be mutualized in the first year, 20 percent in the second year, the rest equally over a further six years.

There will also be an obligation for EU countries to guarantee up to €100,000 in any savings account, but there is no common backstop in case they fall short. …

[ScaniaBoy]

There will also be an obligation for EU countries to guarantee up to €100,000 in any savings account, but there is no common backstop in case they fall short. …

All countries with their own currencies (and their own printing presses!) have a lender of last resort. The euro countries don't. Just didn't think of that when they came up with the blue-print for the euro! That's the quality of persons deciding our fates.

PS: Yes, a printing press and the use of, will increase the likelihood of inflation, but the lack of said instrument will do the same for bankruptcy, which in the short run is a worse option.