July 24, 2018 / 9:56 AM / 3 months ago

Euro zone bank fund holds 25 billion euros after four years

BRUSSELS (Reuters) - The fund designed to shield taxpayers from future banking crises in the euro zone totalled 24.9 billion euros (22.19 billion pounds) at the end of June, close to half the maximum size it is supposed to reach in 2023, the institution in charge of it said on Tuesday.

FILE PHOTO: A sculpture showing the Euro currency sign is seen in front of the European Central Bank (ECB) headquarters in Frankfurt, December 8, 2011. REUTERS/Alex Domanski/File Photo

Euro zone countries created the fund, and the Single Resolution Board that runs it, in 2014 to finance the winding down of failed banks as a means of better managing bank risk.

It is being financed by banks themselves, with contributions due to reach 1 percent of all covered deposits in 2023. In 2014 the European Commission estimated that as equivalent to around 55 billion euros.

The board said that, as of 30 June, it had collected 7.5 billion euros from 3,315 institutions in annual contributions and the bank held 24.9 billion euros in total.

Euro zone finance ministers agreed in June that their bailout fund should be able to lend the bank resolution fund up to 60 billion euros in the event of a major crisis.

Money from the bank fund may be used to guarantee the assets or liabilities of a bank under resolution, lend to that bank, buy its assets or pay shareholders or creditors.

It cannot be used directly cover losses or to recapitalise a bank.

Reporting By Jan Strupczewski; editing by John Stonestreet

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