ECB's Asmussen: ESM needs rule change to be used as resolution backstop

Reuters

FRANKFURT (Reuters) - There have to be changes to the treaty governing the euro zone's permanent bailout fund before it can be used as a backstop for the future bank resolution mechanism, European Central Bank Executive Board member Joerg Asmussen said on Wednesday.

"You can't do it under the current ESM Treaty. It has to be changed," Asmussen said at a conference organised by Commerzbank. ESM refers to the European Stability Mechanism.

Changing those rules does, however, not require a change to the EU Treaties, he added.

Asmussen also said that while the European Banking Authority (EBA) was in charge of conducting stress tests on the region's banks, it would cooperate closely with the ECB.

Results of the stress tests and preceding asset quality review, which will be conducted by the ECB, will give one figure per bank revealing their capital needs, smussen said.

This figure will be published next autumn, before the ECB takes over supervising the bloc's banks.

(This story has been corrected to fix the first paragraph to say that Asmussen meant ESM rules in regard to resolution mechanism)

(Reporting by Sakari Suoninen and Jonathan Gould)

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