EU nations 'to be responsible for each other's banks'

30 May 2012

EU nations 'to be responsible for each other's banks'

Countries in the European Union (EU) may be obliged to bailout struggling banks from fellow member states it has emerged.

New draft laws created by officials at the European Commission (EC) - which are scheduled to be formally proposed on 6 June - have been designed to clarify how wind-up orders for failing financiers will work in the future.

The rules have been kept under wraps amid fears among policymakers that they may destabilise the region's banking sector but a draft version of the new proposals has come into the public domain.

These reforms represent a significant step towards stronger fiscal integration in the EU as they will effectively make countries responsible for each other's lenders, should the companies run into trouble.

An EU official has described the move as a display of "aggressive intervention powers" that will clean up the financial arena by ensuring debt-ridden firms remain under control.

By Gary Cooper

Comments (1)
GB Raymond Winter says:
May 30, 2012 16:43 GMT
As long as the UK is not expected to support the Euro countries that's acceptable. However, if Cameron does anything to include the UK, without a referendum on the UK's relationship with the EU, the Tories will never, ever, get back into power. Currently he has 'form' for not keeping his election promises so he is distrusted in much the same way as Blair, Brown and Balls for causing the UK's problems. In fact, in my view the 3B's should be in court to answer treason charges.
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