Today's Coming Crisis Movie

Friday, March 29, 2013

ECB's Knot backs Dijsselbloem comments on bank rescues... Yes, about Cyprus being a Model for Future Bailouts

European Central Bank Governing Council member Klaas Knot said on Friday there was "little wrong" with Eurogroup chair Jeroen Dijsselbloem's recipe for dealing with future euro zone banking crises, a newspaper reported.

Dijsselbloem, the head of the euro zone's finance ministers and like Knot a Dutchman, said on Monday the rescue program agreed for Cyprus - the first to impose a levy on bank deposits - would serve as a model for future crises.

Those comments - which Dijsselbloem later rowed back on -prompted a market selloff and led two other ECB policymakers, including executive board member Benoit Coeure, to say on Tuesday that Cyprus was a unique case.

But Knot, who sits on the bank's main decision-making body, said: "There is little wrong with Dijsselbloem's remarks.

"The content of his remarks comes down to an approach which has been on the table for a longer time in Europe. This approach will be part of the European liquidation policy."

http://www.reuters.com/article/2013/03/29/us-eurozone-cyprus-ecb-knot-idUSBRE92S05P20130329