Minister of Finance Matti Vanhanen (Central) reassured fears of Finns and Finnish banks about becoming a payer in the EU Banking Union.
- Finland's goal has been to separate taxpayers and banks from each other.
So that the banking system also takes care of its own mistakes.
Now this is coming true, Vanhanen said at his press conference.
- After that, we have a system in which the owners of the banks are primarily responsible for their mistakes.
If that money is not enough, the banks have raised a common reserve fund - currently more than EUR 40 billion - to deal with the problems of an individual bank.
If that is not enough, the banking system will jointly take on the debt, which will be repaid later, Vanhanen continued.
On Monday, the Eurogroup agreed on the reform of the European Stability Mechanism (ESM) and the early mobilization of the Banking Union Joint Resolution Fund (SRF).
According to Monday's decision, EVM can finance in addition to the states and start financing banks.
The arrangement was brought forward by two years and will take effect in 2022.
If the resources of the Bank Crisis Management Fund are insufficient, banks can borrow from EVM.
Minister of Finance Vanhanen said that in the arrangement of the banking union, the taxpayer is not responsible for crisis banks.
- After the financial crisis, Finland, like the rest of Europe, has had the goal of a banking union, which would break the fate that banks and taxpayers have in each bank's home country.
Creating a resolution system that, if realized, means that bank owners and investors will be held responsible for the banks' mistake.
- If that money is not enough, then the banks will be used together to raise funds.
It has accumulated more than EUR 40 billion and will be increased to EUR 70 billion.
If they were not enough, there would be an opportunity to increase the capacity of the resolution fund through joint borrowing, which would later be repaid by European banks.
In other words, we would move to a system in which the banking system creates its own mutual pool, with which they handle the problems that will arise for some banks, Vanhanen reiterated the Eurogroup's decision on Monday.