The European Union should seek to create a ‘banking union' in which lenders face tough, common rules allowing them to be wound down without recourse to taxpayer bailouts, the bloc's top financial services regulator said. The EU should be prepared to bolster regulations adopted since the crisis that was unleashed after the 2008 collapse of Lehman Brothers Holdings Inc., Michel Barnier, the European commissioner for financial services, said Tuesday in a Bloomberg Television interview in Paris. "We must go further, and create at the level of the European Union this banking union, with a certain number of tools or reforms, some of which are already on the table," Barnier said. The European Commission is scheduled to present plans on June 6 that would empower regulators to force writedowns on unsecured creditors at failing lenders. The measures also include imposing a levy on lenders to finance the stabilization of crisis-hit banks, and requiring nations to lend to a government that doesn't have the reserves to tackle a banking crisis. Barnier's proposals would apply across the EU's 27 member states, and must be agreed on by governments and by the European Parliament before they can enter into force. EU leaders last week asked European Union President Herman Van Rompuy to examine further options for bolstering financial integration in the 17-nation euro area, including the establishment of a cross-border deposit insurance program. "At least the member states of the euro zone must be linked together" in the banking union, Barnier said. "But I'll work so that all 27 member states are in it." One area where more EU ambition is "probably" needed concerns the powers given to the European Banking Authority, Barnier said, according to Bloomberg.
