BREAKING NEWS
This content is not available in your region

Common fiscal backstop, EU deposit scheme essential to cut bank, sovereign links

Common fiscal backstop, EU deposit scheme essential to cut bank, sovereign links
Text size Aa Aa

MADRID (Reuters) – A common fiscal backstop for the single resolution fund and a common European deposit scheme (EDIS), with eventual full risk mutualisation, are essential to cut links between banks and sovereigns, the Bank of Spain head said.

“Both are essential elements to severe the links between banks and sovereigns and to bolster the ability of the area to deal with large macroeconomic shocks,” Bank of Spain Governor Luis Maria Linde said on Wednesday.

European leaders are to decide in June on the path to introduce a common deposit insurance scheme and provide a backstop for a euro zone bank resolution fund in case it were to run out of money during a major banking crisis.

Linde also noted that the development of the Capital Markets Union was another key project that deserved to be mentioned at the top of the political agenda.

(Reporting by Jesús Aguado; Editing by Paul Day)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.