European finance ministers have reached the basis of an agreement to wind down failing banks and share the costs, Eurogroup President Jeroen Dijsselbloem told CNBC following a 16 hour marathon negotiating session in Brussels.
The agreement is expected to begin with a Cyprus-style “bail-in” process in which major depositors in failing banks are tapped first in an effort to support the lender.
Then, if more cash is needed, national resolution funds would be used. And if further funds are needed, this would be pooled from across the region over the next five to 10 years, forming the basis of a common fund.
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