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EU agrees new rules on bank bailouts

EU nations have agreed new rules for bank bailouts to save taxpayers from paying for the rescue of a...
TodayFM
TodayFM

8:28 AM - 12 Dec 2013



EU agrees new rules on bank ba...

News

EU agrees new rules on bank bailouts

TodayFM
TodayFM

8:28 AM - 12 Dec 2013



EU nations have agreed new rules for bank bailouts to save taxpayers from paying for the rescue of ailing financial institutions.

Under the terms of the deal reached in the European Parliament banks will have to put money aside for a rainy day.

The parliament said the move shows the EU is learning the lessons of the banking crisis.

Big step tonight," EU Commissioner Michel Barnier wrote on Twitter. "Taxpayers (are) no longer in front line" to pay for banks' mistakes, he added.

"This is a fundamental step towards the completion of the Banking Union," Barnier said in a separate statement.

The new system will take effect from 2016.

The "bail-in" will primarily require important hits to be taken by shareholders and bond holders of a financial institution in trouble.

Small depositors will be explicitly excluded from incurring any costs but depositors with more than €100,000 ($137,000) could be affected, though lastly under a pre-defined hierarchy, the European parliament said in a statement.



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