US News Governing Council member for state aid to support banks

Frankfurt (Reuters) - From the perspective of the Greek central bank chief Yannis Stournaras, the EU should soften its rules for state aid in order to strengthen the banks in view of the corona crisis.

© Reuters / Ralph Orlowski FILE PHOTO: A euro logo sculpture stands in front of the headquarters of the European Central Bank in Frankfurt

"In exceptional cases, I am in favor of a more flexible attitude towards state aid," wrote the ECB Council member in an on Friday published guest article for the "Handelsblatt". The European directive on bank resolution (BRRD) could deal with the collapse of individual banks, but not with systemic crises. The pandemic has brought the need for a more resilient banking sector to the fore.

Grande-Synthe recourse: the government has three months to prove its climate efforts

© LUCAS BARIOULET In January 2019, the environmental mayor of Grande-Synthe, Damien Carême, appealed to the State Council for “climate inaction” of the government. Here on September 21, 2019 in Paris. Following the unprecedented appeal formulated by the municipality of the North against the State for “climate inaction”, the Council of State has issued a positive decision, which is revolutionizing climate policy.

Browse schedules for the meetings of the Governing Council and General Council of the ECB and related press conferences. Get an overview of what the European Central Bank does and how it operates.

State Aid Manual of Procedures - Internal DG Competition working documents on procedures for the application of Articles 107 and 108 TFEU. It also includes measures covered by the Temporary framework for State aid measures to support access to finance in the current financial and economic

Video: Subdued consumer mood (Reuters)

"The establishment of asset management companies that receive a state guarantee for appropriate remuneration should be recognized as a permissible measure," demanded the central banker. Europe's money houses have been considered low-income for years. They also suffer from the comparatively low valuation on the stock exchanges. A sharp increase in bad loans on their balance sheets in the wake of the corona pandemic could therefore lead to systemic risks. Such asset managers as brought into play by Stournaras - also known as "bad banks" - could help the institutions to free their balance sheets from shaky credit.

Stournaras also advocated improving the provision of liquidity in the resolution of banks. The liquidity requirement could then easily go beyond what is currently planned, he explained. Stournaras sees a role for the European Central Bank (ECB) here. "Based on the experience of the UK central bank, the establishment of a special credit line by the ECB could be considered, subject to appropriate safeguards," he said. Other euro watchdogs had also spoken out in favor of such an instrument for bank resolutions in the past.