15:12 Apr. 29, 2016
EU officials on implementation of plan that will handle bank collapses
The European Union still has work to do to prepare for handling bank collapses in the event of a new financial crisis, EU officials said on Friday, urging member states to agree on pooling more resources to weather future storms.
Following the euro zone debt and banking crisis, EU countries have designed a banking union meant to strengthen lenders' financial stability, but have not brought the plan to completion yet.
During the 2008-12 financial crisis euro zone countries paid billions of euros to rescue failing lenders who were exposed to risky financial products.
"There is still lots to be done to make sure that we are in the best possible position to resolve a failing bank," EU Financial Services Commissioner Jonathan Hill said on Friday before praising the progress achieved since the last financial crisis in making the European banking system more stable.
A key new instrument to prevent banking crisis is the upfront drafting of resolution plans for the main euro zone banks, so that when a lender is on the verge of collapse it can be rescued in a short timeframe, ideally in a weekend.
The Single Resolution Board, a new EU banking body, is in charge of preparing these plans but only some of them are already available.
"We have come a long way, but we are not there yet. We do not have these plans yet for all banks, but we are getting there," SRB member Joanne Kellermann told a conference on Friday.