The mechanism would include national resolution funds for banks as well as a "bail-in" mechanism so that banks' bondholders could take a hit if a lender goes bust.
"We are still discussing some issues, such as size, preference, percentage of the hit, but there is now an appetite for the scheme which did not exist in the past, in particular at the ECB," the official said.
European Central Bank officials called in the last two weeks for the European Union to come up with a European bank resolution mechanism and a European deposit guarantee scheme to better handle potential problems at pan-European financial institutions.
The central bank, just like many euro zone policymakers, had been wary of tackling the issue of bank resolution before, fearing it would further scare markets already nervous about euro zone sovereigns and the financial sector.
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