London, Berlin drag feet over financial rescue

Britain and Germany have blocked calls for the European Union to draw up detailed plans on who would foot the bill for a public bail-out to avert a cross-border crisis if a financial institution failed. Report from the Informal Ecofin Council, Helsinki, 9 September 2006.

The official Press Release stated: The Ministers and Governors continued their discussions on financial market development and stability issues. The main issue this time was the evaluation of the crisis management simulation exercise held in April 2006 to test the Memorandum of Understanding signed in 2005. The Ministers welcomed the exercise, which was successfully carried out by the banking supervisors, central banks and Finance Ministries of the European Union. The exercise confirmed that the existing voluntary arrangements in the EU have the potential to work well in a crisis situation. However, the exercise also gave a number of useful insights on how to further improve the management of cross-border financial crises and even further increase the overall financial market stability in Europe. For this purpose the ministers agreed on the direction of further work in this area'.