• It is in interest of financial sector to contribute to safety net
  • One-off tax of 0.2% on euro area bank assets would allow about 50 bln euros to be raised
  • Envisages purchase of sovereign debt on secondary market for stability mechanism
  • Critical mass of paid-in capital offers best protection against downgrading of any member state
  • ESM funding options include transfer of EFSF cash buffer instead of returning to guarantors
  • EFSF cash buffer should contain 4.2 bln in 2012, assuming only Ireland gets aid, more if others get support
  • ESM could be funded partly by fines from new surveillance framework
  • ESM could also be funded through interest accrued on own activities
  • Funding for ESM could include transfer of allocated special drawing rights of euro member states
  • 5-6 bln euros could be obtained for ESM if euro area uses special drawing rights