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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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza