U.K. to Oppose EU Plans for Bank-Financed Support Funds
The U.K. will oppose European Union plans to force all nations to set up permanent, bank-financed funds that would be used to cover costs at failing lenders.
“We want to register again the U.K. concern about the ex- ante resolution fund, which certainly in the British context wouldn’t make a great deal of sense,” U.K. Chancellor of the Exchequer George Osborne told ministers at a meeting today in Brussels. “We already have very high, in fact the highest, bank taxes in Europe with our bank levy.”
Michel Barnier, the EU’s financial services chief, presented plans last year to take taxpayers off the hook for bailing out banks. The proposals include empowering regulators to impose losses on senior bank creditors, and setting up national funds to stabilize and cover restructuring costs at failing lenders.
Swedish Finance Minister Anders Borg said that the law should explicitly state that governments can nationalize a bank if that represents the best long-term deal for the taxpayer.
“It has been said many times that this is probably the most efficient way of dealing with a banking crisis,” Borg said. “It should be in the core of the banking resolution directive that it’s possible,” he said, adding that governments are “making painfully little progress” on this point in the draft law.
Separately, Barnier urged at today’s meeting that governments speed up deliberations on a draft law, known as Mifid, to overhaul the EU’s financial markets rulebook.
“The delay with Mifid is invoked by some, especially in the U.S., as a justification of a unilateral approach,” Barnier said.
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