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EU: To protect taxpayers, EC reins in bank state aid

By  |  July 8, 2013

An anonymous official for the European Commission told reporters the regulator is planning to release updated guidelines for issuing state aid to failing banks later this month in efforts to ease the burden off taxpayers and onto private creditors. The officially, who decline to be named as the proposals are not yet public, said the guidelines will take effect August 1 and will require creditors and bank shareholders to take financial losses before government aid is issued. Since Lehman Brothers Holdings collapsed in 2008, the Commission has issued $2.2 trillion in banking aid. According to reports, the draft regulations will be presented on July 10, the same day banking centralization proposals are revealed.

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