The UK’s finance minister George Osborne was quoted by BBC radio as saying that the UK will also incorporate necessary steps to safeguard its banking sector.
"I think Britain will require certain safeguards if there is a full-blown banking union," Osborne told the radio channel.
Declining to be a part of the proposed Euro-banking union, the minister said there is no way that Britain is going to be part of any euro zone banking union.
The 17-member eurozone in collaboration with European Central Bank is mulling to fix a deepening debt crisis by forming European Banking Union.
The minister also advised the eurozone members to use its bailout fund to recapitalise Spain’s distressed banks.
Any improvement in common bank depositor insurance in the euro zone will be effective only, when the UK will approve the change, said Osborne.
"What’s clear is … Spain need to restructure their banking system, they need resources to do that. How exactly that is done … must be a matter for the Spanish goverment and the euro zone."
European Central Bank head Mario Draghi and euro members have proposed to establish a pan European Banking Union to overcome the worsening debt crisis and push reforms in the financial sector.
The proposed three-pillared union will have central monitoring of banks, a fund to wind up big lenders and a pan-European deposit guarantee.
