EU unveils plans to wind down failed banks

European Commission has outlined plans for a single authority that will be responsible for winding down eurozone banks that get into trouble.

The blueprint for a "single resolution mechanism" was unveiled by EU commissioner Michel Barnier.

It may put the Commission on a collision course with Germany, which has argued that such an authority would be in breach of EU treaties.

The authority is part of wider plans for a European banking union.

The banking union project is designed to prevent a repeat of the global banking crisis.

Under the single resolution mechanism (SRM), a new authority will be given power to close or restructure any eurozone bank that runs into trouble.

This would override the decisions of authorities in individual EU states, which are currently in charge of closing failed banks.

Critics have warned that this could mean national governments being required to hand over taxpayers' money to help rescue banks.