EU deal to block future bank bailouts by taxpayers
Friday 28 June 2013
The chances of European taxpayers again having to bail out a failing bank dropped dramatically yesterday after European Union finance ministers agreed details of a new bail-in regime.
Creditors and shareholders of all banks inside the 27 EU countries, including the UK, will take the first hit in any future crisis. The rules outline a strict order in which investors and creditors will have to join a bail-in, with a taxpayer bailout now the last resort.
"For the first time, we agreed on a significant bail-in to shield taxpayers," said the Dutch finance minister, Jeroen Dijsselbloem. "That's a major shift from the public means, from the taxpayer if you will, back to the financial sector itself, which will now become for a very, very large extent responsible for dealing with its own problems."
Tim Dolan, partner at law firm SJ Berwin, said: "All creditors of banks, and particularly unsecured bondholders …need to understand that there is now a greater risk that they will suffer some loss should their bank fail in the future."
The new rules will not come into force until 2018, and ministers have yet to agree whether bank bail-ins should be ordered by individual countries or a single central authority.
Individual savers will still be protected up to €100,000 (£85,000) of savings.
- 1 Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
- 2 iOS 8 apps and features: eight iPhone settings you need to look at after you install the update
- 3 Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
- 4 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 5 Scotland could still declare independence – even without referendum, says Alex Salmond
Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
Khorasan: Muhsin al-Fadhli - the man leading a terror group more feared by US officials than Isis
'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
Alicia Keys leaks own nude photo 'to create a kinder and more peaceful world'
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...
Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...