Brussels plans bank resolution agency for 2013

 
Julian Harris
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BRUSSELS will push ahead with plans to form a pan-European agency to shore up or wind down troubled banks as soon as a banking union is introduced next year, commissioner Michel Barnier said yesterday.

His statement came as Ireland was confirmed as a “special case” in being eligible for an earlier retroactive recapitalisation of its banks.

President Francois Hollande met with Irish Prime Minister Enda Kenny yesterday, and echoed German Chancellor Angela Merkel’s weekend comments which appeared to pave the way for aid to Irish lenders.

“The Irish specificity is that for several months there had already been a recapitalisation of banks via the budget which worsened Ireland’s debt and forced it to impose a tough plan,” he said. “I said Ireland was a special case and should be treated as such.”

Asked if recapitalisation could be back-dated, the French leader responded: “Yes, recapitalisation already took place through their own funds so the Euro Group will take that into account.”

Earlier in the day Barnier, who is in charge of financial regulation, confirmed EU leaders aim to agree a deal for a new banking union by the end of this year. Barnier added that the next stage will be forming a body to support or close in an orderly manner struggling lenders.

“The second stage is a proposal in 2013 for a European resolution agency,” he said, adding this would have broad powers to shut bust banks, protecting taxpayers, and work closely with national authorities.