FRANKFURT, Oct 20 (Reuters) - The head of the EurogroupWorking Group has proposed an earlier start of 'bail-in'arrangements which force bondholders to share losses in a bankfailure, in a bid to win over German concerns over creating abanking union, a magazine reported.
Thomas Wiesner suggested to the group of Europeannegotiators that 'bail-in' rules should come into effect from2016, German weekly Der Spiegel reported on Sunday.
His proposal was received well at the meeting, the magazinesaid.
The 'bail-in' rules, which are due to come into effect in2018, are part of euro zone plans to unify and strengthen thesupervision and support of banks across the bloc, known asbanking union.
European governments, which bailed out dozens of banks withbillions of euros of state aid after the financial crisis, wantto avoid costly future rescues.
The acceleration of the plans could help persuade Germany,which has called for a 2015 deadline, to agree to a Europeanbank resolution scheme - the second pillar of the banking union,the magazine reported.
Berlin does not want a new agency in Brussels or elsewherewhich has powers to overrule its own national authorities on the issue of whether to save or close an ailing bank.
It also opposes any fund that requires it to pick up part ofthe bill if, for example, a bank in Spain ran aground.
According to a separate media report, Mario Draghi, EuropeanCentral Bank head, wrote to the European Commission last monthasking that bondholders be spared any losses in the event of abank rescue until a Europe-wide banking union is fullyoperational.
The Eurogroup Working Group comprises mainly deputy financeministers and senior treasury officials. It helps prepare thediscussions of the Eurogroup, a meeting of finance ministers ofcountries whose currency is the euro.
- bank failure