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Berlin, asked about Italy, says bail-in rules are key for saving banks

Berlin, asked about Italy, says bail-in rules are key for saving banks© Reuters. FILE PHOTO: A EU flag is seen outside the EU Commission headquarters in Brussels

BERLIN (Reuters) – The European Union’s “bail-in” rules covering failing banks are a crucial instrument, a German Finance Ministry spokesman said when asked about a Bank of Italy official’s comment that they were damaging and virtually impossible to apply.

“The bail-in rules that we came up with are one of the key lessons from the financial crisis – they are there and will be adhered to,” the spokesman told a news conference on Monday.

Designed after the global financial crisis to shield taxpayers from costly bank bailouts, bail-in rules require investors in a bank to bear losses before public funds can be tapped.

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Source: Investing.com

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