Germany and France closer to bank union

 
Tim Wallace
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FRENCH and German politicians were last night close to a deal on the banking union, making progress towards deciding how failed banks are funded.

Germany has wanted national authorities to take the lead, while France has argued for a central fund.

“There has to be both a single resolution fund and a role given to national input,” French minister Pierre Moscovici told the Financial Times last night. “That is not a contradiction. It is an articulation between them that we are seeking.”

Meanwhile credit ratings agency Moody’s warned lenders face another year of struggling to recover from the financial crisis.

Despite some larger economies showing signs of life, the banks are still far from health, Moody’s said.

Some regions like Norway and Sweden could even see house price crashes, endangering some of their lenders, it warned. And those in eastern Europe could suffer from currency and commodities price volatility through 2014.

Moody’s expects the coming banking union plans to be positive in the long-run for the banks in the Eurozone and other countries that join in.