LUXEMBOURG – European Union finance ministers are seeking an agreement on how to downsize or close banks without having to call on taxpayers to bail out ailing lenders.
The EU's 27 finance chiefs' meeting in Luxembourg on Friday weighed the order in which investors and creditors would have to absorb losses during bank restructurings.
One of the stumbling points is who would be hit hardest: Should losses be limited to banks' shareholders and creditors, or should uninsured deposits worth more than 100,000 euros ($132,000) also be included?
Ministers said they were bracing for marathon negotiations as they headed into the meeting. The EU's top economic official, Commissioner Olli Rehn, said there was "a fair chance" to conclude on the common rules.