ECB's Mersch: Need quick way to plug any bank capital holes
VIENNA, Sept 24
VIENNA, Sept 24 (Reuters) - National governments need to act as financial backstops in case next year's round of bank stress tests reveals additional capital needs that cannot be raised on the market, European Central Bank Executive Board member Yves Mersch said on Tuesday.
Mersch said that if governments were unable to do so, another public backstop would have to be used.
"Banking union is not a transfer union through the back door," Mersch said in the text of a speech to be given at an Austrian banking conference.
"When both options - private sector and national budgets - are exhausted, a further form of safety net must be used."
"It has to be assessed on a case-by-case basis to what extent a temporary access to a public backstop is needed to ensure a quick and smooth recapitalisation without excessive use of taxpayer money or a negative impact on financial stability."
Mersch, however, did not detail how this other backstop would work. (Reporting by Michael Shields, writing by Sakari Suoninen; editing by Ron Askew)
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