March 12, 2018 / 2:00 PM / a year ago

No breakthrough on EU banking package soon - Germany's Altmaier

BRUSSELS, March 12 (Reuters) - There will be no breakthrough in the negotiations on finishing the European Union’s banking union, Germany’s interim finance minister Peter Altmaier said on Monday.

The euro zone wants to complete its banking union by creating a euro zone-wide deposit insurance scheme which would boost the confidence of savers in banks and protect deposits of up to 100,000 euros in any euro zone bank.

But Germany, Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden say that before work on such a deposit insurance scheme can start, euro zone banks have to reduce their exposure to risks.

“I don’t think we will have a common approach on this tomorrow as there are still too many unsolved questions,” Altmaier told reporters on arrival at a meeting of euro zone finance ministers.

“We can only make progress if in those countries where there are many bad loans and many unsolved issues remain, the risk of a new banking crisis is reduced,” he added.

Other issues for the completion of the banking union include how banks should provision for bad loans and whether to set limits on banks’ holdings of securities of a single government. (Reporting by Robert-Jan Bartunek; editing by Jan Strupczewski)

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