We need your help now
Support from readers like you keeps The Journal open.
You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.
If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.
Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
By continuing, you are indicating that you accept our Terms of Service and Privacy Policy.
THE HEAD OF the European Central Bank has admitted that initial plans to impose losses on all depositors in Cyprus as part of its bailout package were “not smart”.
Mario Draghi was speaking in Frankfurt today as the ECB left its main interest rate unchanged at 0.75 per cent, the ninth month in a row the bank has opted to leave interest rates unchanged.
He said that initial plans to impose losses on small and large depositors in Cypriot banks was “not smart” and said that the Mediterranean country’s troubled offshore financial sector demonstrated the importance of having a banking union within the eurozone.
“There is no better way to prevent these crises than by shedding light on national banking systems via the sort of international oversight that would be in place” with a single supervisory mechanism, Draghi told reporters.
Saying that any delay in setting up a single supervisor would be “extremely disappointing” Draghi called for the new eurozone authority to start operating by 2015 rather than 2018 as is currently proposed.
“It is very urgent that we have in place a European framework for resolution, restructuring and recapitalisation of the banking systems. These are the lessons I would draw from the Cyprus event,” he said.
The Italian banker also insisted that the Cypriot bailout – which totals €10 billion and involves imposing losses on large depositors in its banks – was not a template for future eurozone bailouts.
This follows recent controversy surrounding comments by the head of the eurozone’s finance ministers, Jeroen Dijsselbloem.
The Dutch finance minister had suggested that imposing losses on depositors and not resorting to the single currency’s permanent bailout fund was the template for future bailout programmes, comments he later clarified insisting there were “no models or templates”.
His initial comments had raised concerns that Ireland would not be allowed to use the fund – the European Stability Mechanism (ESM) – to retrospectively recapitalise banks which it has poured over €25 billion of taxpayers’ money into.
On Ireland, Draghi said today that it was up to eurozone finance ministers to determine if the ESM could be used to recapitalise Irish banks.
The Department of Finance in Dublin has consistently maintained that it wants to progress an initial agreement between eurozone finance ministers and “avail of the new recapitalisation tools that are being developed”.
- with reporting from AFP
To embed this post, copy the code below on your site
It’s ok – if you’re looking for a really good podcast check out hunting warhead, the subject matter is difficult but i highly recommend. Hackers hacking hackers to bring down the worlds biggest pedofile ring on the dark net.
@Tommy Sheridan: Thanks for the recommendation, going to check this out
@Tommy Sheridan: Thx for the tip!
I was 4 when this story broke and i can still remember my then teenaged sisters crying at the TV watching it.
Doors chained shut is a horrifying thought, but in the context of that time, not so starnge. Health and safety as we know it now didn’t exist.
I was at a festival back in October, a complete idiot decided to throw a lighted cigarette up on top of a marquee with a lot of young people in it. No-one saw it happen, but there were only young people there and the next day the marquee company, who were taking it down, called me over on-site to see it. They wanted a witness to the damage it caused, so they could rightfully be compensated for the damage. Right over the marquee, which was on a sports ground, were CCTV cameras that would have very likey captured the incident. I asked the marquee company to report it to cops, who I think would have pursued it given the oppurtunity, but they said no as it would have impacted their working relationship with the sports ground. So the arsehole in question got away scot free.
Shite talk: An Irish history podcast. Quite fun.
have your say