Michel Barnier outlines proposals for banking union

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The European Commission has unveiled proposals designed to stop taxpayers' money being used to bail out failed banks.

The aim is to ensure losses are borne by bank shareholders and creditors and minimise costs for taxpayers.

However, new legislation is unlikely to came into force before 2014 at the earliest, too late to protect taxpayers from any further immediate bank failures.

Michel Barnier, the European Commissioner in charge of regulating finance, said: "We must equip public authorities so that they can deal adequately with future bank crises."

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