ECOFIN on the way to banking union
On Thursday EU finance ministers reached an agreement on the new policy to manage restructuring and liquidation of banks. The deal is one of the steps on the way to establish a banking union, which has as ultimate objective to break the link between bank debt and sovereign debt.
Yesterday's ECOFIN meeting agreed what types of creditors must take losses in future banking crises. The draft document ensures that depositors with savings under 100K euros will be protected from any loss. The agreement has to be now ratified by the heads of state and government at the two-day EU summit which started today.