Talks under way on euro bank safety net

The credibility of Europe’s efforts to restore confidence in its financial system hangs in the balance as lawmakers try to broker a deal on a bank-failure authority for the 18-nation eurozone.

As US Treasury Secretary Jacob J Lew tours EU capitals to push for tougher banking regulations, European Parliament legislators and officials from Greece, which holds the EU’s rotating presidency, begin talks in Brussels today to create a central agency for saving or shuttering eurozone banks before elections in May.

When EU finance ministers settled on a blueprint in December, European Central Bank president Mario Draghi “strongly” welcomed the plan, though it diverged from the ECB’s position.