Europe moves closer to scheme to close troubled banks

European Union countries edged slowly towards agreeing a scheme to shut failing banks on Tuesday, although a final deal on wider reform to prevent a repeat financial crisis may not be reached until next week. On Tuesday, European Union finance ministers began negotiating how to create an agency to close euro zone banks and a fund to pay for the clean-up – completing a ‘banking union’ where the European Central Bank polices the sector. A banking union is widely viewed as essential to shore up the currency-sharing group against future debt and financial crises. It requires countries such as Germany to surrender sovereignty and could demand that they pay towards repairing banks in neighboring states.

    

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