ECB’s Constancio: may need public money in bank failures
Banks should pay for winding down their failing peers but sometimes taxpayer money may also be needed in this process, European Central Bank Vice President Vitor Constancio said on Tuesday.
- may be a need for “temporary use of public money when, for example, a bridge bank needs to be created
- public money should be in the form “of credit lines that need to be repaid later on
- banks should be the first line of funding for any bank resolution schemes.
- banking union project did not necessarily need to involve a joint deposit guarantee agency from the beginning