FRANKFURT Oct 20 The head of the Eurogroup
Working Group has proposed an earlier start of 'bail-in'
arrangements which force bondholders to share losses in a bank
failure, in a bid to win over German concerns over creating a
banking union, a magazine reported.
Thomas Wiesner suggested to the group of European
negotiators that 'bail-in' rules should come into effect from
2016, German weekly Der Spiegel reported on Sunday.
His proposal was received well at the meeting, the magazine
The 'bail-in' rules, which are due to come into effect in
2018, are part of euro zone plans to unify and strengthen the
supervision and support of banks across the bloc, known as
European governments, which bailed out dozens of banks with
billions of euros of state aid after the financial crisis, want
to avoid costly future rescues.
The acceleration of the plans could help persuade Germany,
which has called for a 2015 deadline, to agree to a European
bank resolution scheme - the second pillar of the banking union,
the magazine reported.
Berlin does not want a new agency in Brussels or elsewhere
which has powers to overrule its own national authorities on the
issue of whether to save or close an ailing bank.
It also opposes any fund that requires it to pick up part of
the bill if, for example, a bank in Spain ran aground.
According to a separate media report, Mario Draghi, European
Central Bank head, wrote to the European Commission last month
asking that bondholders be spared any losses in the event of a
bank rescue until a Europe-wide banking union is fully
The Eurogroup Working Group comprises mainly deputy finance
ministers and senior treasury officials. It helps prepare the
discussions of the Eurogroup, a meeting of finance ministers of
countries whose currency is the euro.