BRUSSELS (Reuters) - Euro zone finance ministers expressed broad support on Monday to allow their bailout fund ESM to become a backstop for the Single Resolution Fund (SRF) for banks, the chairman of the ministers Mario Centeno told a news conference.
The SRF is meant to finance the winding down of failing banks in the 19 countries that share the euro and gets its money from annual contributions from banks.
But euro zone policy-makers believe that to be credible to markets, it needs a backstop, in case it does not have enough cash at any given moment to finance the winding down of a bank. The bailout fund is to become such an emergency backstop which, should it ever be used, would get repaid by banks later.
European Commissioner for Economic and Financial Affairs Pierre Moscovici told the news conference details of the backstop arrangement would be agreed by ministers in March so that it could come into operation from the start of 2019.
Reporting By Jan Strupczewski and Francesco Guarascio