EU Weighs Direct Aid to Banks

European Commisson also calls for common bond issuance as crisis antidote.

The European Commission called for direct euro-area aid for troubled banks and touted common bond issuance as an antidote to the debt crisis now threatening to overwhelm Spain.

The commission, the European Union’s central regulator, sided with Spain in proposing that the euro’s permanent bailout fund inject cash to banks instead of channeling the money via national governments.

Banking Union

The commission appealed for a “banking union” that would more tightly integrate supervision and create a pool of European funds to clean up banks with cross-border exposure and segregate their underperforming assets.

Political Recommendations

An answer to that question may come in political recommendations to be issued later today and outlined in a press conference by commission President Jose Barroso and Economic and Monetary Commissioner Olli Rehn.

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