|EU Could Wind Down Ailing Banks|
People involved in negotiating a European banking union are discussing entrusting the European Commission or the euro zone’s bailout fund with winding down ailing banks rather than creating a separate authority, a German newspaper said.
That would help Europe make progress towards a banking union as it would not require European Union (EU) treaties to be changed since treaties already mention the European Commission and European Stability Mechanism (ESM), Sueddeutsche Zeitung said in an article to appear yesterday.
The paper gave no further details regarding the identities of its sources.
The option would likely be more palatable to Germany, whose Finance Minister Wolfgang Schedule appeared to slam the brakes on a European banking union last month by saying the EU needed to consider a treaty change due to the “doubtful legal basis” on which the project rested.
One scenario calls for the European Commission to take on the role of a banking resolution authority.
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Published on our website on May 13, 2013