7 Jun 2012

Move to take failing banks under control

11:22 am on 7 June 2012

The European Commission has proposed far-reaching powers for regulators to take control of failing banks.

The aim is to prevent a repeat of the chaos after the fall of the American trading house Lehman Brothers, in 2008.

The plans would empower regulators to intervene to prevent a collapse from triggering panic.

Approval is needed from EU countries and the European Parliament.

Meanwhile the European Central Bank is holding its main interest rate at 1%.

ECB president Mario Draghi agrees the economic outlook is bleak, but says cutting interest rates, or injecting money into the banking system by way of more long-term loans, are unlikely to help solve the eurozone's problems.