EU ministers agree rules on bank collapses - by Benjamin Fox

Bank shareholders and creditors will be first in line to suffer losses if their bank gets into difficulties, according to draft rules agreed by ministers in the early hours of Thursday morning (27 June).

EU Banks to be held accountable

Ministers had been hoping to seal a deal last Friday (21 June) in Luxembourg but nearly 20 hours of talks broke up with disagreement on how much flexibility governments would have to fire-fight in a crisis.

However, with the final EU summit before the summer recess just hours away, and with the European Commission anxious to table its delayed proposal for a single resolution mechanism (SRM), finance ministers managed to agree a compromise

Under the new regime, banks' creditors and shareholders would be the first to take losses. But if this proves insufficient to rescue the bank in question, savers holding uninsured deposits worth more than €100,000 would also take a hit.

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