ECB Executive Board Member Says Cyprus Bailout Shows Why The Eurozone Needs a Banking Union

What could possibly go wrong?

(Reuters)—The bailout of Cyprus shows how urgently the euro zone needs to establish a banking union to break the negative feedback loop between weak banks and governments, European Central Bank Executive Board member Joerg Asmussen said on Wednesday.

Cyprus this year became the fourth euro zone country that needed to be bailed out by international lenders, and unlike any other aid deal it controversially forced depositors to foot the cost of recapitalizing banksexposed to debt-crippled Greece.