15 Nov 2013
ECB's Asmussen calls for setting bank backstops before asset quality review is concluded
FXstreet.com (Barcelona) - ECB Governing Board member Joerg Asmussen urged EU national governments on Friday to consider putting in place backstops for banks before the asset quality reviews are conducted, in case the financial institutions prove to need more capital.
"From the ECB side we always said it was absolutely necessary that we have credible backstops in place before the whole exercise starts, so we need three layers of backstops. These are first private markets, second domestic markets, or domestic bank rescue funds, and the third layer is the European Stability Mechanism (ESM) as it stands," he said.
Speaking ahead of the second day of Eurogroup meetings in Brussels, he emphasized the importance of reaching an agreement on the Single Resolution Mechanism before the end of 2013.
"From the ECB side we always said it was absolutely necessary that we have credible backstops in place before the whole exercise starts, so we need three layers of backstops. These are first private markets, second domestic markets, or domestic bank rescue funds, and the third layer is the European Stability Mechanism (ESM) as it stands," he said.
Speaking ahead of the second day of Eurogroup meetings in Brussels, he emphasized the importance of reaching an agreement on the Single Resolution Mechanism before the end of 2013.