European Fund can also be Used for Banks in Need. The banking sector in the European Union (EU) has an additional financial safety net, namely the ESM. Previously emergency fund was used for countries such as Greece, Ireland and Spain.
The EU leaders concluded at a meeting in Brussels that from now on this fund will not only be able to help governments, but also problem banks, reported by MAG Mania.
Prime Minister Mark Rutte calls the ESM “very suitable as a safety net for banks, but there are conditions attached to it”.
For example, banks must reduce their stock of non-collectable loans. The northern Member States are afraid that they will otherwise pay for weak banks in other countries.
The credit line of the ESM comes into play when other measures at problem banks are inadequate.
The shareholders first have to indent and afterwards, they approach the banks’ resolution fund. That fund is still under construction and must contain 53 billion pounds by the end of 2023.
For December, valuable development must be made with the completion of the Banking Union.
All banks ultimately fall under the same European supervision and deposit guarantee scheme.
The French-German plan not substantively discussed for a eurozone budget.