Members of the European Parliament vote during the last plenary session before May 25 elections on April 15, 2014 at the European Parliament in Strasbourg, eastern France. MEPs vote today on key elements of the EU's new 'banking union' regulatory system, designed to prevent failing banks from damaging the wider economy. Photo AFP-Lehtikuva
Three measures created to ensure that banks shoulder the risks of failure rather than relying on taxpayers to bail them out were approved by the European Parliament (EP) Tuesday.
The measures, namely the Bank Restructuring and Resolution Directive, the Single Resolution Mechanism Directive and the recast Directive on Deposit Guarantee Schemes, are designed to prevent countries from using taxpayers' money to shore up failing banks.
Two of the measures deal with restructuring and winding down troubled banks, and the third measure ensures that banks, not taxpayers, guarantee deposits under 100,000 euros (139,000 U.S. dollars) in the event of a run on a bank.
Yannis Stournaras, President of EU's Economic and Financial Affairs Council said these legislative acts "are significant milestones for the European Union, its banking sector and for its common currency."
