No Eurozone recovery until big banks are allowed to fail

 
Tim Wallace
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GROWTH will only return to the Eurozone when markets have confidence that failed banks can be wound up without wreaking havoc on the rest of the sector and the economy, Eurogroup president Jeroen Dijsselbloem said yesterday.

And he said effective resolution mechanisms are only the first step in creating a banking union, with joint deposit guarantee schemes also vital to the stability of the sector.

“The prosperous future of the Eurozone depends on us rebuilding and restoring confidence in the banking sector,” the Dutch finance minister said in Brussels. “By ensuring that the private sector bears primary responsibility for bank resolution, market discipline will be increased and a sustainable, healthy financial sector can be achieved.”