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29 April 2015

Reuters: Germany to keep agency for troubled banks while EU fund set up

The SRM is intended as a pan-European bailout fund, which will be built up over eight years from levies on banks that start 2016, reaching a total of 55 billion euros by 2024. It will then replace any national agencies.

Germany's cabinet has agreed on a draft law for maintaining an emergency reserve to help German banks that get into trouble while a pan-European agency is being built up, a government spokesman said on Wednesday.

Germany set up its national agency, called the Restructuring Fund, in 2011. From 2011 to 2014, German banks paid 2.3 billion euros into that Restructuring Fund.

Under the new rules, Germany would hold on to those funds rather than giving them back to the banks or using them to offset bank contributions to the new pan-European fund, as called for by German banking associations.


The draft law will give German banks an extra buffer during a time in which the European agency's funds will be relatively small.

Full article on Reuters

© Reuters

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