The European Commission has suggested the idea of bailouts for ailing banks directly rather than helping national governments.
"To sever the link between banks and the sovereigns, direct recapitalisation by the ESM [European Stability Mechanism] might be envisaged," the commission said.
The European Stability Mechanism is the eurozone's permanent bailout fund.
The call comes as fears over the health of Spanish banks have shaken markets.
The ESM becomes operational from July, but is currently designed only to lend to ailing governments.
The commission's comments came in an analysis of Europe's response to the debt crisis.
It added: "A closer integration among the euro area countries in supervisory structures and practices, in cross-border crisis management and burden sharing, towards a 'banking union' would be an important complement to the current structure of EMU."
It did not say what it meant by a banking union.
No comments:
Post a Comment