Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

ECB: Needs way of financing banks during wind-down: Constancio

share with twitter share with LinkedIn share with facebook
share via e-mail
0
04/09/2018 | 07:00pm CEST

FRANKFURT (Reuters) - The European Central Bank needs a way to finance failing banks while they are being wound down, ECB vice-president Vitor Constancio said on Monday, citing the British and U.S. models as possible examples.

A bank run on Spain's Banco Popular last summer laid bare a hole in European rules, which bar the ECB from supporting a failing bank while the European Union's Single Resolution Board organizes a rescue.

Constancio cited Britain, where the Bank of England can request an indemnity from the government on loans extended to banks in resolution, and the United States as possible models.

"The UK and U.S. have... a solid, whole process of resolution that includes those liquidity problems during that period of time, and I hope that Europe will get to some solution to this problem," Vitor Constancio told the European Parliament.

Banco Popular was immediately bought by larger peer Santander, which allowed it to keep functioning as normal.

But the Spanish case showed how the euro zone framework, which lets national central banks provide Emergency Liquidity Assistance to cash-strapped lenders only if these are still viable, is not fit for purpose.

Sources say the ECB is considering taking on the task via a new lending facility called Eurosystem Resolution Liquidity.

But any such move is likely to require approval from the Eurogroup of euro zone finance ministers, where richer countries fear it could be used inappropriately to prop up banks with public money.

(Reporting by Francesco Canepa; Editing by Hugh Lawson)

Stocks mentioned in the article
ChangeLast1st jan.
BANCO SANTANDER 0.42% 4.572 End-of-day quote.-16.55%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Economy & Forex"
09/22While Trump Grumbles About Fed, His Picks Exude Pragmatism
DJ
09/22NASA NATIONAL AERONAUTICS AND SPACE ADMINIST : When Earth and the Moon Block SDO’s View of the Sun
PU
09/22PRESIDENCY OF REPUBLIC OF TURKEY : “First condition of independence in today's world is to become a country that develops and exports technology”
PU
09/22OPEC and allies struggle to pump more oil as Iran supply falls
RE
09/22OPEC, allies overachieved on output cut by 600,000 bpd in August - Oman
RE
09/22EESC EUROPEAN ECONOMIC AND SOCIAL COMMITTEE : #JubelFestival - EESC members discuss new ideas for the future of Europe
PU
09/22NOC NATIONAL OIL : AGOCO revives 16 year old well
PU
09/22Take Five - World markets themes for the week ahead
RE
09/22CARIBBEAN DEVELOPMENT BANK : CDB video wins gold advertising award
PU
09/22Italy's cabinet undersecretary says meeting all electoral pledges is tough
RE
Latest news "Economy & Forex"
Advertisement