Jan. 16 (Bloomberg) -- Finland wants bank shareholders and bondholders to bear the brunt of future rescues, bringing in taxpayer money to clean up troubled financial businesses only as a last resort, Finnish Prime Minister Jyrki Katainen said.
The setup of euro-area bank regulation needs to change the “mindset from bail-out to bail-in,” Katainen, allied with Germany and the Netherlands in talks on the new system, told reporters in Brussels today. “Only in rare, exceptional occasions, public money should be used.”
While saying the European rescue fund should be limited to dealing with future banking crises, Katainen said Finland hasn’t made up its mind how to treat Ireland, which wants European money to help overcome its banking woes.
Katainen praised Ireland’s economic overhaul without saying whether it deserves a concession that would smooth its way back to market financing this year. The treatment of Ireland is an “open question,” he said.
Aid negotiations for Cyprus are a “delicate issue,” Katainen said. Russia could contribute, he said, much as non-euro countries have supported prior bailouts. He echoed German concerns about money laundering, saying Cyprus’s creditors “have to know how the banks are behaving.”
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