European summit: the Eurozone at the bedside of its banks

Christine Lagarde, President of the European Central Bank. AP - Michael Probst

Text by: RFI Follow

2 min

The second day of the EU summit in Brussels will be devoted to the Eurozone two weeks after the collapse of Silicon Valley Bank, a week after Credit Suisse tumbled.

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With our correspondent in Brussels, Pierre Bénazet

As a sign of Europeans' concern, the Eurozone summit has been extended to all EU states in addition to the twenty member countries of the single currency. The fear of banking contagion persists on the markets, even if the financial crisis that began (with the bankruptcy of Lehman Brothers) in 2008 led Europe to equip itself with very solid tools. European banks are therefore out of danger, have been hammering politicians for two weeks; this is particularly the case of the President of the European Central Bank Christine Lagarde who will ask the heads of state and government to "complete the European Banking Union".

International banking rules, known as Basel III rules, were not applied to Silicon Valley Bank or Credit Suisse. The European Union, for its part, stresses that it has a bank resolution fund, minimum liquidity rules, a banking supervision board, an arsenal of tools and very strict rules that it will apply to the letter. And the President of the European Central Bank wants the Eurozone to go further and pleads for the reform of the crisis management tool to be accelerated by creating deposit insurance at European level. For the time being, the deposit guarantee, set at EUR 100 000 per account, is provided by each country on its own. Similarly, consideration is being given to ensuring that all banks are subject to the direct supervision of the European Central Bank; For the time being, banks that manage less than €30 million in assets are supervised by each country on its own.

The ECB president also calls for a single capital market that would allow companies looking for funds not to have to go around all European financial centers.

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• European Union
• Finance