The incoming head of Europe's new single banking supervisory authority has warned that weak eurozone banks will be allowed to fail following upcoming stress tests.
Daniele Nouy was giving her first interview since being appointed chief of the Single Supervisory Mechanism, set up as part of attempts to stabilise the EU's banking system and shift the financial costs of failed banks away from sovereign governments
"We have to accept that some banks have no future," she told Monday's edition of the Financial Times newspaper.
"We have to let some disappear in an orderly fashion, and not necessarily try to merge them with other institutions".
Nouy also told the business publication that lenders should be forced to hold collateral against their sovereign bonds in order to break the toxic link between failing banks and governments.
The European Banking Authority is assessing the health of 124 EU banks across 22 countries, and is expected to announce its results in October.
