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What has been announced by ECOFIN (European Council of Finance Ministers) today:

  • Deposit insurance to be raised from a minimum of EUR20k to EUR50k.
  • There will be support/interventions for systemically important institutions; intervention shall be timely, and in principle temporary; shareholder shall bear the consequences of intervention; governments will have the ability to change bank management when intervening.

Bad for shares.

  • Recapitalizations may be necessary.
  • Interventions to be decided at a national level, but to be coordinated; senior financial officials to be in daily contact.

They are limited by relying on the national government’s ability to fund.

  • Commission to provide rapid reviews of interventions; Commission to issue guidance on state-aid compliant deposit insurance and interventions/recapitalizations.
  • Systemic liquidity to be ensured.

Maybe in Euro, but maybe not in USD which they all seem to need.

  • Executive pay guidelines have been agreed; undue benefits shall not be retained; governments can intervene on manager pay.


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