Looking for His glorious appearing! Titus 2:13

At a meeting of EU finance ministers, the Chancellor will give British backing to a new principle that taxpayers should no longer have to pick up the bill for insolvent banks, meaning that debts must be written off, replacing bail-outs with “bail-ins” of creditors.

Mr Osborne will, however, express his concerns that the proposed new regime does not give the Bank of England (BoE) the “discretion” to look at wider economic and financial stability questions before taking a view on which creditors take on the losses of a failed bank.

His fear is that proposals for “depositor preference” set at the EU level might force the BoE to target bonds in a troubled bank that are owned by other financial institutions, often pension funds. Those creditor institutions that lent money would then be hit by losses, potentially creating a “domino effect” spreading beyond one failed bank to the entire financial sector.

In such circumstances, Britain wants the Bank of England to have the power to consider imposing losses on depositors, above the secured level of €100,000 (£85,000) as well as bondholders, to preserve financial stability.