EU agrees new bank rescue rules to spare taxpayers

European finance ministers on 26.06.2013 agreed a deal on new rules to shift the burden for future bank rescues from taxpayers to the financial sector

The measures, which still have to be adopted by the European Parliament, will force bank owners and bond holders firstly and then depositors with more than 100,000 euro to bear the losses.

“Our aim is to have a common approach throughout Europe so our taxpayers no longer have to shoulder the burden,” said Irish Finance Minister Michael Noonan, who chaired the talks as current holder of the EU presidency.

Noonan said governments would no longer have to save banks that were “too big to fail” as the deal would end the “vicious link” that forced countries to step in and rescue lenders in order to prevent wholesale collapse.

Hopefully the new rules would be finalised by early next year at the latest and the plan is that they would then come into effect from 2018.