ECB policy maker pushes for centralised bank resolution fund

18 June 2013

Jorg Asmussen, a senior policy maker at the European Central Bank (ECB), has called on the eurozone to agree on a plan that would see the process of winding down or paying for insolvent banks become more centralised.

He said in a speech in the eastern German city of Magdeburg that the declining profitability at eurozone banks was one of the main risks to financial stability, the Financial Times reports.

Mr Asmussen's standpoint is likely to be met with opposition from Germany, which has largely been against such a move.

The German government has resisted any move towards centralisation, claiming it violates European Union treaties by denoting too much power over banks and their assets to the European level. Its constitutional court is reportedly already probing the compatibility of the ECB's measures.

Mr Asmussen believes the EU needs an authority with necessary instruments and powers so it can act efficiently when winding up banks.

By Claire Archer

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