November 15, 2013 / 8:14 AM / 4 years ago

Euro zone must have backstops before bank health checks: ECB

BRUSSELS (Reuters) - Euro zone governments must put in place ways to financially support their banks in case they need more capital as a result of health checks by the European Central Bank next year, ECB Executive Board member Joerg Asmussen said on Friday.

European Central Bank (ECB) executive board member Joerg Asmussen addresses reporters during a news conference after his meeting with Greece's Finance Minister Yannis Stournaras in Athens August 21, 2013. REUTERS/John Kolesidis

European Union finance ministers meet on Friday to discuss backstops for banks in time for the ECB’s bank asset quality review, the results of which are due in October 2014.

“We will continue to discuss this today,” Asmussen told reporters on entering the meeting.

“From the ECB side we always said it is absolutely necessary that we have credible backstops in place before the whole exercise starts, so we need three layers of backstops, these are first private markets, second domestic budgets or domestic bank rescue funds and the third layer is the ESM as it stands,” he said.

Reporting By Jan Strupczewski; editing by Adrian Croft

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