June 10, 2018 / 8:28 PM / a year ago

Backstop for EU bank fund to be set up soon: SRB chair

FILE PHOTO: Elke Koenig, Chair of the Single Resolution Board, speaks during an interview with Reuters in Brussels, Belgium, August 10, 2016. Picture taken on August 10, 2016. REUTERS/Francois Lenoir

FRANKFURT (Reuters) - European Union member states will soon decide on a backstop for the EU bank rescue fund, the chairwoman of the Single Resolution Board (SRB) said in a newspaper interview released ahead of publication on Monday.

“Regardless of who I talk to, nobody says we should reconsider this plan once again,” Elke Koenig told the Frankfurter Allgemeine Zeitung (FAZ).

She said she expected the backstop, needed to increase the financial stability of the bloc’s Single Resolution Fund (SRF), to amount to 60 billion euros ($70.65 billion).

The backstop, part of the EU’s banking union strategy due to be decided on by the end of June, is a credit line which the SRF is meant to receive in case its own means are insufficient.

The SRF is funded by banks in order to supply finance to wind down a lending institution in crisis.

Koenig said she expected the SRF to grow to more than 60 billion euros by 2023 from its current level of 25 billion. Previously, its full size was forecast to be 55 billion euros.

EU leaders want the fund to be well capitalized so it can provide liquidity in the event of a broader banking crisis.

Reporting by Vera Eckert, editing by Mark Heinrich

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