EU Finance Ministers to Decide Bank Bailout Investment

Euro zone finance ministers will decide on Thursday when and how their bailout fund can invest in a bank to save it from failure, laying a cornerstone of the banking union seen as vital to restore economic growth.

Ministers from the 17 countries using the euro will also set guidelines for how much a government would have to contribute to such a bank rescue, which banks would be eligible, and who would lose money in the process.

“We will reach a decision on all aspects of direct recapitalization,” a senior European Union official involved in preparations for the meeting said.

Euro zone leaders want the European Stability Mechanism (ESM) bailout fund to be able to become a shareholder in a systemically important bank so that the expense of saving the institution does not fall just on the shoulders of a government that may already be struggling with huge debts.

via CNBC

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