BERLIN (MNI) – ECB Governing Council member Christian Noyer opposes
proposals by private bank CEO’s that public money should flow into a
European bank rescue fund, he told German business daily Handelsblatt in
an interview published Friday.
“Any sort of insurance of banks by governments — be it directly or
indirectly — must be prevented,” Noyer, who heads the Bank of France,
was quoted as saying.
If banks act in an irresponsible manner they don’t deserve to be
saved, the central banker argued. Only depositors should be protected,
he said. Thus, new regulation should ensure that banks can be liquidated
without hurting depositors, Noyer argued.
The paper also cited ECB Executive Board member Juergen Stark as
saying that “we must not create new incentives for ‘moral hazard’ by
creating an emergency fund for banks which is co-financed by tax payers’
money.”
The Vice President of the Swiss National Bank, Thomas Jordan, said
Thursday that future financial market regulation must prevent big banks
from continuing to act under the assumption they will always be saved by
the government in the case of an emergency.
Switzerland is working hard on a solution that would make it
possible for banks to fail without endangering the whole economy, Jordan
said. “The goal is that banks assume their risks fully by themselves in
the future,” he said.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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