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

4-Traders 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 0.70% 5.505 End-of-day quote.-0.22%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Economy & Forex"
01:12aHEALTHY HOMES : Spring green cleaning recipes to help reduce asthma irritants
PU
01:03aConsumer activists, experts advise against buying ZTE phones
RE
12:58aMORGAN STANLEY : Wall Street regulator sanctions Tezos cryptocurrency project co-founder
RE
12:47aECOSOC UNITED NATIONS ECONOMIC AND SOCIAL COUNCI : Activities of Secretary-General in Saudi Arabia, 15-18 April
PU
12:37aATLANTIC CARBON : ACG New 200M Share Subscription and Co Valuation Announcement
PU
12:37aITC INTERNATIONAL TRADE CENTRE : Sierra Leone to strengthen cocoa value chain, increase farmer incomes
PU
12:37aDCEDC DEKALB COUNTY ECONOMIC DEVELOPMENT CORPORA : 3 Workshops/Seminars for Businesses & Aspiring Entrepreneurs
PU
12:27aGOVERNMENT OF ALBERTA : New protection for Alberta power consumers
PU
12:21aLAKE COUNTY IL : Recycle First, Trash Last
PU
12:09aGerman growth likely to slow in first quarter - finance ministry
RE
Latest news "Economy & Forex"
Advertisement