ECB calls for common EU approach on debt write-offs

[FRANKFURT] The European Central Bank called on Tuesday for a common approach in the European Union to writing off debt, in order to make it easier to shore up a failing international banks without having to call on taxpayers.

"A common framework at Union level on the degree of subordination of senior unsecured bank debt ... may help to avoid fragmentation of the market within the Union ... for these instruments and to avoid complicating the tasks of the ECB both with regard to monetary policy and to supervision," the bank said in a legal document.

The comment was part of a legal opinion on a German draft law on banking resolution, which delegates certain regulatory powers to the ministry of finance.

The ECB said diverging national legislation on the matter "has an impact on the ECB's exercise of its responsibilities"and could hamper significantly a level playing field for banks.

The opinion echoed recent comments by Julie Dickson, one of the ECB's top supervisors.

REUTERS