25 Sep 2013
ECB's Asmussen: Changes to ESM treaty needed before it can be used for resolving banks
FXstreet.com (Barcelona) - ECB Executive Board member Jörg Asmussen said today that the Eurozone should consider introducing changes to the treaty establishing the European Stability Mechanism before the resolution mechanism can be used for recapitalizing the regions´s ailing banks.
Asmussen emphasized that in this case EU Treaties would remain intact. He also added that the ECB would closely cooperate with the European Banking Authority on running stress tests of Eurozone banks. The outcome of the tests, due to be published in autumn next year, will specify the capital needs for each examined bank.
The ECB Executive Board member also urged the creation of a single bank resolution mechanism in the EU, as national governments are not able to handle bank backstops on their own.
In the opinion of Ryan Littlestone from Forex Live “any mention of long drawn out treaty changes to the 'backstop' plans they've been working on could add some downward bias to the euro.”
Asmussen emphasized that in this case EU Treaties would remain intact. He also added that the ECB would closely cooperate with the European Banking Authority on running stress tests of Eurozone banks. The outcome of the tests, due to be published in autumn next year, will specify the capital needs for each examined bank.
The ECB Executive Board member also urged the creation of a single bank resolution mechanism in the EU, as national governments are not able to handle bank backstops on their own.
In the opinion of Ryan Littlestone from Forex Live “any mention of long drawn out treaty changes to the 'backstop' plans they've been working on could add some downward bias to the euro.”