- Published on Monday, 24 June 2013 08:34
- Written by Morninf Star.co.uk
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European Union finance ministers ended around-the-clock talks in Luxembourg on Saturday without agreement on a way to downsize or close banks that wouldn't force bank savers to foot the bill.
Irish Finance Minister Michael Noonan said that the negotiations he chaired would need another "full meeting" on Wednesday and warned: "There is no guarantee it will reach a conclusion."
Ministers hinted at a prolonged impasse between members of the 17-nation eurozone and the 10 other EU members.
An agreement on the rules was to be a step in stabilising Europe's financial system and establishing a so-called banking union to hand the supervision and rescue of banks to European institutions.
The ministers had sought to set new rules determining the order in which investors and creditors would have to pay for bank restructurings.
But a key stumbling block was who to hit hardest. Should losses be limited to banks' shareholders and creditors, or should small firms and ordinary savers holding uninsured deposits worth over €100,000 (£85,000) also be included?
The most controversial issue proved to be how much leeway member states should be granted in making decisions on winding down banks.
Some states such as Britain don't want to be bound by EU rules. Others warned that too much flexibility would create new imbalances between the bloc's weaker and stronger economies.