FRANKFURT, Jan 22 (Reuters) - Europe should accelerate the buildup of its planned bank resolution fund and aim for five rather than ten years, European Central Bank executive board member Benoit Coeure said on Wednesday.
The European Union’s blueprint to close failing banks features a single resolution fund that banks will pay into over the next ten years, giving roughly 55 billion euros ($75 billion).
But Coeure said the single resolution fund (SRF) should be build up faster than that.
“Robust and common resolution financing arrangements are also required: in this regard, the period of ten years for moving towards a genuinely common SRF is too long and should be shortened, possibly to five years,” Coeure said in the text of a speech to be given at an EU conference.
Adequate backstops have to established for both the transition period and when the fund is in full working order, Coeure added.
Coeure, whose portfolio at the ECB’s executive board includes market operations, also said financial market fragmentation had “significantly” receded in the euro zone.
Inflation at too low levels was as bad as too high inflation, he also said. In December, euro zone annual inflation was 0.8 percent, well below the central bank’s target of just below 2 percent. ($1 = 0.7383 euros) (Reporting by Sakari Suoninen)