FRANKFURT: The banking system is better positioned and capitalised than before but would still not be fully prepared for a big bank collapse, European Central Bank Governing Council member Erkki Liikanen said in a newspaper interview on Monday.
"The world would be better prepared than before but not fully prepared," Liikanen told German daily Die Welt. "It's positive that banks these days are better capitalised. But that's not enough."
"We urgently need a legal framework for the closure and settlement of banks. The top goal must be that, in the case of a bank collapse, the owners are the first to pay the bill and not the taxpayers," he said.
Liikanen said separating operations within banks can be especially helpful to simplify the banking business and that banks should operate any
speculative operations on their own accounts using market-based financing including their own capital.
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