EU seeks fund for bank bailouts

LUXEMBOURG – Eurozone finance ministers on Monday sought ways to create a common fund to restructure or bail out troubled banks in an effort to keep financial problems in one country from endangering the entire 17-nation currency zone.

The fund would complete Europe’s planned banking union and help restore market confidence, but Germany and other nations have concerns about its legal basis and fear their taxpayers will be stuck with bills to clean up messy banks in weaker European economies.

Before the fund can become operational, European countries aim to set up a new banking authority with the power to restructure or unwind banks that went bust. That is expected to happen once the European Central Bank has analyzed all balance sheets to identify possible capital shortfalls by late next year.

Associated Press