Europe prepares bailout fund to rescue banks

European leaders are working on a scheme to tackle the eurozone crisis which, if implemented, would see a continent-wide rescue fund seize control of struggling banks.

In a similar move to that followed in the UK - where the government nationalised Northern Rock and bailed out Lloyds and Royal Bank of Scotland (RBS) - European nations are now considering a rescue fund to prevent the crisis escalating. According to the Sunday Times, the scheme would be funded by a levy on banks, and is being worked on alongside a proposal from Italian Prime Minister Mario Monti to guarantee all consumer deposits across Europe. The hope is the financial lifeboat would remove the risk of a bank collapse, providing certainty for institutions to lend to each other more c...