Onsdagsbörsen 26 Juni

FXstreet.com (Barcelona) - Over the end of last week, negotiations among European Finance Minister to agree on how to share the financial costs of future collapses in European banks could not be complete.

On Wednesday, decision-makers will meet again ahead of a EU Summit that takes places Thursday, in order to make further progress over the banking union. Marc Chandler, Global Head of Currency Strategy at BBH, highlights that there are four dimensions to the issue, saying "it is difficult to know what comes first and what is last."

Chandler adds: "The four elements are a single supervisor, a single bank resolution authority, direct bank recapitalization from the ESM and new rules on how the costs would be distributed between investors, creditors, depositors and tax payers."

One of the outcome that appears safe to anticipate though, as Chandler points, is that the banking union will not come into effect this year. The Strategist goes further by predicting that none of the four components are likely to be implemented before the end of 2014 at the earliest.

On the so-called "bail-in rules", failure to move forward and further cement a common vision on a key element of the banking union will surely hit investor confidence negatively, Chandler added.

Inlägget är redigerat av författaren.

He comments that European finance ministers will meet today ahead of the Summit that begins Thursday afternoon in order to see if more progress can be made on the banking union. He adds that talks broke down at the end of last week, without resolution and there are four dimensions to the issue and like a Mobius strip or an Escher drawing, it is difficult to know what comes first and what is last. He writes, “The four elements are a single supervisor, a single bank resolution authority, direct bank recapitalization from the ESM and new rules to regarding how the costs would be distributed between investors, creditors, depositors and taxpayers

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