Reuters: Bankruptcy News: ECB's Draghi has asked to delay bank bail-in plans -paper

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ECB's Draghi has asked to delay bank bail-in plans -paper Oct 19th 2013, 11:05 Share this Email Print Reprints MILAN | Sat Oct 19, 2013 7:05am EDT MILAN Oct 19 (Reuters) - Mariro Draghi, European Central Bank head, wrote to the European Commission last month asking that bondholders be spared any losses in the event of a bank rescue until a Europe-wide banking union is fully operational, la Repubblica newspaper reported on Saturday. The Italian daily cited sources with direct knowledge of the letter sent by ECB President Draghi. The ECB and the Commission were not immediately available to comment. "The ECB president is not against imposing losses on bank creditors once the European banking union operates at full speed. Draghi, however, fears that imposing losses on bondholders now, potentially for dozens of European lenders at once, can destabilise markets," the paper said. "Bail-in" rules stating that bondholders must share losses in a bank failure are due to go into effect in 2018. They are part of euro zone's plans to unify the supervision and support of banks in the bloc, known as "banking union." The EU agreed on a bail-in plan earlier this year. And some ECB policymakers want this brought in more quickly. The ECB is due conduct a health check-up of European banks before taking up supervision of the sector late next year. Analysts expect the ECB's banking sector review to reveal capital shortfalls among lenders in weaker countries such as Italy. Link this Share this Digg this Email Reprints

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