Asmussen Says Bailout Fund Could Wind Down or Capitalize Banks

European Central Bank Executive Board member Joerg Asmussen said Europe’s permanent bailout fund could act as a resolution mechanism as well as providing capital to ailing banks, as long as certain conditions are met.

A so-called Single Resolution Mechanism “would have the legal and financial capacity, as well as the independence, to ensure that viable banks survive and non-viable banks are closed down,” Asmussen said late Tuesday in Frankfurt, in remarks embargoed for today. Such a body could “concentrate decisions on resolution and act pre-emptively and quickly, helping to preserve the value of banks and save money for taxpayers.”