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BANKING UNION : ANY SPECIFIC DEVELOPMENT ?

THE EUROPEAN COMMISSION UNVEILED FORMAL PROPOSALS FOR A BANKING UNION FOR THE EURO ZONE, WHICH WOULD HAND NEW SUPERVISORY POWERS, SUCH AS THYE ABILITY TO CLOSE POORLY PERFORMING BANKS, TO THE EUROPEAN CENTRAL BANK.

IF ADOPTED, THE PLAN IS A PRECURSOR TO ALLOWING DISTRESSE LENDERS TO TAP THE EUROPEAN BAIL-OUT FUND DIRECTLY, RATHER THAN THROUGH SOVEREIGN FUNDS, THUS RELIEVING PRESSURE ON GOVERNMENT DEBT.

SOURCE : THE ECONOMIST SEPTEMBER 15TH 2012.

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