December 14, 2012 / 12:45 PM / 6 years ago

Funding for euro zone single bank resolution mechanism to be decided later

BRUSSELS, Dec 14 (Reuters) - The European Union has not worked out yet how to fund a single euro zone bank resolution mechanism in the transition period until enough fees from banks accrue for winding down failing financial institutions, a senior EU official said on Friday.

“In some way we have to work on that... So this is a matter for discussion and decision later on,” Herman Van Rompuy, who chairs meetings of EU leaders, told a news conference at the end of a two-day summit.

The executive European Commission will present a proposal on how to set up the single resolution mechanism sometime in 2013.

EU leaders agreed on Thursday that the single resolution mechanism should be based on contributions by the financial sector itself and include “appropriate and effective backstop arrangements”.

But accumulating enough money from bank fees could take years.

“This backstop should be fiscally neutral over the medium term, by ensuring that public assistance is recouped by means of ex post levies on the financial industry,” the leaders said in conclusions of the meeting.

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