Eurozone Finance Ministers have acted to reassure both EU banks and their customers by announcing their first measures aimed at protecting capital.
The news comes as the European Central Bank affirmed that it will continue to inject liduidity into the financial system for as long as necessary.
No big financial group will be allowed to go to the wall, promised Chairman of the group Jean-Claude Juncker who said: “We will do everything possible to prevent the big companies falling one after the other. The states will stand as guarantors to prevent this happening.”
Last week, the Republic of Ireland’s decision to give a blanket guarantee for savings led to a rush of foreign customers eager to put their cash in a safe home.
“Its vital to avoid the negatives consequences of unilateral decisions,“said EU Commissioner Joaquin Almunia, “this has already caused problems for some member states and we must absolutely put a stop to it.”
The Eurozone is also planning to raise the level of guarantee for savings to 40 thousand euros, and speed up reimbursement in the event of a collapse.