Dijsselbloem rejects calls for looser banking rules

Source: Reuters

Eurogroup chairman Jeroen Dijsselbloem rejected calls for banking union regulations to be loosened after weeks of falling bank shares, saying new European bail-in rules had caused investors to look "more critically" at risks born by banks.

Speaking on Dutch radio on Saturday, Dijsselbloem, who is also the Dutch finance minister, said stricter rules imposed in the wake of the 2007 financial crisis that would restore confidence in banks.

"We now have much stricter rules for who pays the bill if banks go wrong, and it's not the taxpayer," he said. "For that reason, investors are looking much more critically at banks, and that is leading to a correction on equity markets."

The Stoxx Eurozone Banks Index .SX7E has fallen more than 25 percent since the beginning of the year, prompting policymakers including Bank of Italy governor Ignazio Visco to call for a more gradual introduction of rules that place the burden of propping up failing banks on investors.

Read more: http://www.reuters.com/article/us-eurozone-banks-dijsselbloem-idUSKCN0VM0JQ