| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : EU Economy Last Updated: Mar 21, 2014 - 8:25 AM

EU banking union moves towards the launch pad
By Finfacts Team
Mar 21, 2014 - 8:23 AM

Email this article
 Printer friendly page
José Manuel Barroso, European Commission president, and Angela Merkel, German chancellor, Brussels, March 21, 2014.

European Parliament and leaders of the European Union at a meeting in Brussels Thursday agreed on a compromise for setting up a Single Resolution Mechanism to deal with failing banks.

The draft agreement requires approval by the Ecofin council of EU finance ministers and a full session of the European Parliament.

The genesis of a European banking union is the biggest reform since the euro was launched in 1999 and the European Central Bank will be the bank supervisor from late 2014. with supervision of big banks in the Eurozone and in other member states which decide to join the banking union. 

Centralised decision-making would be built around a strong Single Resolution Board (the 'Board') and would involve permanent members as well as the Commission, the Council, the ECB and the national resolution authorities. In most cases, the ECB would notify that a bank is failing to the Board, the Commission, and the relevant national resolution authorities. 

Banks could be and wound down by this central authority - -  if necessary against the wishes of its home state - - using a €55bn rescue fund, which will be funded by banks.

A compromise was reached on building up the resolution fund over eight years, rather than 10. It also ensures that a bigger proportion of the fund is fully shared at an earlier stage.

Time limits are included to enable wind-up decisions to be taken swiftly over a weekend before markets open. However, the system would still involve more than 100 separate voting decision-makers on multiple panels.

Enda Kenny, taoiseach, welcomed the agreement: “We are moving towards the game of putting structures in place for restructuring, by which matters of recapitalisation can be considered, and which can be applied on case by case basis from the end of the year.”

On Thursday it was agreed that 40% of the rescue fund will be mutualised in the first year, 20% in the second year and the remainder over the following six years. The fund will be able to raise money on the markets.

So after three years, if an Irish bank needed a bailout, 70% of the fund would be available.

The prospect of Ireland getting retroactive direct recapitalisation of Irish banks to refund sovereign support, has receded further.

Check out our subscription service, Finfacts Premium , at a low annual charge of €25

Related Articles
Related Articles

© Copyright 2011 by Finfacts.com

Top of Page

EU Economy
Latest Headlines
Spain's strong recovery to slow in the next few years
Italy's Mezzogiorno is Achilles' heel of Euro Area - lowest birth rate since 1862
Euro Area GDP grows at weak 0.3% in Q2 2015
German GDP up 0.4% in Q2 2015; France's GDP stagnates
Germany's Surplus: Lots of critics; Credible solutions scarce
Euro Area industrial production dips in June and May after a flat April
Greece faces two years of recession according to EU officials
High EU youth unemployment rate not as bad as it seems
Eurozone retail PMI surges to highest since January 2011
ECB monetary policy still tight for Southern Europe
German exports fell in June — surplus at record; Exports up 13.7% year-on-year
Eurozone manufacturing sector continued to expand in July
Weak euro unlikely to have significant impact on Euro Area growth
Is Euro Area Ireland's top trading partner?: EU28 is overwhelmingly UK's
German car firms boost exports from Spain, UK, Portugal, Czech Republic, Slovakia, Hungary and Romania
Flash Eurozone manufacturing/ services PMI close to four-year high despite Greek crisis
Krugman calls euro a Roach Motel; Hotel California gets 1-star grade
Greece & Euro Crisis: July 2015 articles from Finfacts
Greece and other poor countries in Euro Area will not become rich
Euro Area manufacturing/ services PMI hits four-year high in June
Western European car market: Recovery continues
Greece could become a failed state like Venezuela
Multinational companies pay on average 30% less tax than domestic competitors in EU
EU's list of 30 tax havens omits the biggest 4 in Europe
China to invest in Juncker's European investment fund
Greek talks collapse; Game theorists gambling with future — Germany's vice-chancellor
German exports and industrial production in strong rises in April
Tackling Inequality: Scandinavian countries have the most successful welfare systems in Europe
Eurozone unemployment fell by 130,000 in April 2015 — down 849,000 in 12 months
Eurozone service sector business activity slowed during May
German 2015 GDP forecast cut; Jobless level at 24-year low
Eurozone manufacturing in modest acceleration in May
FDI into Europe at record in 2014; UK on top: Germany location for future investment
Eurozone economy loses growth momentum; Jobs growth rises
Athens leak suggests Juncker has plan for Greece
Draghi will not end QE early but warns of risks
Eurozone grows faster than US and UK in Q1 2015
German GDP at slower pace, France faster in Q1 2015
Germany may cut income tax; Germans still shun risky investments
Germany had record exports and imports in March 2015