European Ministers Set To Finalize Bank Bailout Rules Today

Deciding when the bailout fund can be used to help a bank


(Reuters) – Euro zone finance ministers will decide on Thursday when and how their bailout fund can invest in a bank to save it from failure, a long-promised move that aims to break a downward spiral between bad banks and their indebted home countries.

Using the power of the 500-billion-euro bailout fund as a backstop for banks is aimed at restoring confidence in the sector, ravaged by three years of debt and financial crisis.

Policymakers hope it will in turn galvanize interbank lending and borrowing, so the wheels of the euro zone economy will start moving again after a lengthy recession.