Biggest banks pay the most for the Eurozone’s resolution fund

Tim Wallace
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EUROPE’S biggest banks will pay a disproportionately large amount towards the new fund designed to cover the costs of any future bank collapse and resolution, Brussels said yesterday.

The €55bn (£43.4bn) fund will amount to one per cent of the banking sector’s liabilities, and will be paid by banks in relation to their size.

But the big banks which make up 85 per cent of the sector will pay for 90 per cent of the fund, easing the burden on smaller lenders.

“This reflects the fact that, in most cases, small institutions have a lower risk profile and are less likely to use resolution funds,” said the Commission.

“Banks representing one per cent of the total assets would pay 0.3 per cent of the total contributions.”

This will work in favour of Germany, which has a large number of small- and mid-sized banks, but harm France where the industry is more concentrated.