The rate of bankruptct has forced the EU members to come up with a solution to prevent banks and financial institutions from costing taxpayers billions and bankrupting governments.
European commissioner responsible for the internal market Michel Barnier was quoted by Associated Press as saying, "We’re going to break the link between banking crises and public budgets."We don’t want taxpayers to have to pay."
Although, the proposal is believed not to come in force before 2018 and in such a situation, it also requires approval of the European Council, composed of the leaders of the 27 EU countries, and the European Parliament.
The EU has no central regulator that can bail out banks anywhere in the eurozone, surpassing national governments unlike the US, where state and federal banking regulators have the power to shut down failing banks.
A central deposit insurance scheme has also been proposed to reassure savers across the continent that their money will not lost in case of a crisis.
