March 4, 2019 / 11:19 AM / 6 months ago

Berlin, asked about Italy, says bail-in rules are key for saving banks

FILE PHOTO: A European Union flag is seen outside the EU Commission headquarters in Brussels, Belgium November 14, 2018. REUTERS/Francois Lenoir

BERLIN (Reuters) - The European Union’s “bail-in” rules covering failing banks are a crucial instrument, a German Finance Ministry spokesman said when asked about a Bank of Italy official’s comment that they were damaging and virtually impossible to apply.

“The bail-in rules that we came up with are one of the key lessons from the financial crisis - they are there and will be adhered to,” the spokesman told a news conference on Monday.

Designed after the global financial crisis to shield taxpayers from costly bank bailouts, bail-in rules require investors in a bank to bear losses before public funds can be tapped.

Reporting by Michelle Martin; Editing by Tassilo Hummel

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