European leaders are preparing a new rescue fund designed to seize control of struggling banks across the continent.
According to The Sunday Times, the fund, which would be funded by a levy on banks, is being worked on in tandem with a proposal from Italian Prime Minister Mario Monti for a Europe-wide guarantee on banks.
It is hoped the plan would remove the threat of bank collapses and restore confidence in the likes of Italy and Spain. The report says the plan would receive backing from the likes of Germany, where politicians have previously been averse to risking the strong financial footing of their own country in a bid to aid the troubled eurozone.
Concerns over the eurozone have deepened in the past few days. Last week, the Spanish government was forced to invest £15bn into the nations’ second largest bank Bankia. The prospect of Greece potentially leaving the eurozone also remains a concern, while in Cyprus, the governor of the central bank gave a strong indication they could the next country to seek a eurozone bailout.