All states 'must commit to direct bank recapitalization decision'

1 October 2012

All member states of the European Union (EU) need to commit to the June decision related to direct bank recapitalization.

This is according to Olli Rehn, economic and monetary affairs commissioner at the EU, who noted there appears to be different interpretations to the outcome, which was made to allow the euro area's bailout fund to recapitalize banks, Bloomberg reports.

He said: "All member states [should] commit to the June decision on direct bank recapitalization, which may be possible through a separate decision once the European banking supervisor has been established."

Regarding the recapitalization rules, Mr Rehn explained a decision could be made by the end if the year.

However, this will only be possible as long as all involved parties work at the same pace as the commission, adding Finland - his home country - should not prolong the crisis as it looks to confine direct recapitalization by the fund to cover the bailing out of lenders following the creation of a single financial supervisor.

By Tony Aynsley

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