ECOFIN:Barnier: EU Wants Coordinated Plan For Bank Crisis Funds

MADRID (Dow Jones)--The European Commission wants banks to pay into national emergency funds that would cooperate in the event of a large cross-border financial crisis, the internal market commissioner told European Union finance ministers and central bank governors Saturday.

Michel Barnier said the commission wants to establish these funds to ensure that taxpayers don't have to pay for the costs of future bank bailouts, as happened in the recent financial crisis.

"Where cross-border groups are concerned, we are for burden sharing," he said in the text of a speech.

Barnier said he would make legislative proposals in 2011. This move would resolve a longstanding question for the EU's single market: how to handle the potential collapse of a large bank operating in multiple jurisdictions.

In the fall of 2008, Belgium, Luxembourg and the Netherlands arranged an emergency rescue for Fortis, breaking the bank into pieces. However, EU officials have said this last-minute effort underscored the need for more explicit contingency plans.