Eurozone may use SRM borrowing to prevent shocks
The EU last week agreed to create a new agency to handle eurozone bank failures. The compromise needs approval by the European Parliament and by national governments to become law.
As part of the SRM deal, an industry-financed Single Resolution Fund will be created to cover the cost of saving or shuttering lenders. During the fund’s start-up period, its resources will be segregated in national compartments.