September 5, 2017 / 9:36 AM / a year ago

ECB says investors must share burden of any bank rescue

FILE PHOTO: The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, December 8, 2016. REUTERS/Ralph Orlowski/File Photo

FRANKFURT (Reuters) - Private investors must share the burden of any bank rescue, a senior European Central Bank supervisor said on Tuesday, calling for subjecting the sector to “market discipline”.

“A substantial private sector burden-sharing is a non-negotiable prerequisite prior to public funds being touched,” Pentti Hakkarainen, a member of the supervisory board of the ECB, told a conference.

“In regulating and supervising financial institutions, we should still make space for market forces and market discipline to act,” he added.

Reporting By Francesco Canepa

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