German Chancellor Angela Merkel said taxpayers won’t be forced to bear the costs of winding down failed banks in Europe.
European Union leaders agreed that resolution “may not be at the cost of the taxpayers, but has to be structured so that those responsible for the failures of the banks carry the burden,” Merkel told reporters after the first session of a EU summit in Brussels today.
The European Commission plans to propose the bank resolution mechanism in 2013, EU leaders said in a statement after the meeting.
The resolution mechanism “will be based on contributions by the financial sector” and will contain backstops that will “be fiscally neutral over the medium term, by ensuring that public assistance is recouped by means of ex-post levies on the financial industry,” the leaders said in the statement.
To contact the reporter on this story: James G. Neuger in Brussels at email@example.com
To contact the editor responsible for this story: James Hertling at firstname.lastname@example.org