BRUSSELS May 5 The euro zone's bailout fund,
the European Stability Mechanism, could directly invest in a
troubled bank next year, but only after 8 percent of the bank's
total liabilities were written off, a top euro zone official
said on Monday.
The bloc's leaders agreed in 2012 that the ESM must have the
option of directly buying a stake in a bank to break the 'doom
loop' that binds indebted governments to the unstable banks they
are trying to prop up.
Jeroen Dijsselbloem, who chairs meetings of euro zone
finance ministers, said that ministers agreed that the ESM
should be able to invest in banks next year after the option of
raising money from private investors or the government failed.
Under new EU rules, from 2016 not only a bank's shareholders
but also bondholders and even large depositors would have to
lose money before government or euro zone money could be used to
save a bank from collapse. EU policy-makers call this a bail-in.
In 2015 alone, before the new bail-in rules take hold from
2016, the euro zone bailout fund would be allowed to buy a stake
in a bank after 8 percent of its liabilities were written off,
according to the ageement of ministers, Dijsselbloem said.
(Reporting By Jan Strupczewski)