Bloomberg: German finance ministry sees no need to give ESM bank licence

31 July 2012

Germany's Finance Ministry has said it sees no need to award a banking licence to the euro region's planned permanent rescue fund.

With a banking licence, the ESM - which is due to replace the current temporary baliout fund, the EFSF - could borrow cash from the European Central Bank and buy virtually unlimited amounts of debt issued by troubled eurozone states.

The rules of the European Stability Mechanism do not foresee a banking license to allow refinancing at the European Central Bank, the Finance Ministry in Berlin said. The ministry isn’t holding talks on the topic, nor are secret meetings taking place on such proposals, it added.

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