SINTRA, Portugal (Reuters) - Suspending 'bail-in' rules making investors and large depositors pay for any bank rescue would mark the end of the European banking union and require supervisors to be much more intrusive, a top European Central Bank official said on Wednesday.
"If you have no market discipline, then you put all the burden to provide the right incentives on banking supervisors, and banking supervision would then be much, much more intrusive," Coeure said at an ECB forum in Sintra, Portugal.
He noted bail-in rules were part of regulation underpinning the European Union's banking union.
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"If you hold the bail-in rules in abeyance today, if that's a step you want to take, then ... it's the end of the banking union as we know it."
He was responding to fellow panelist and former Bank of England official Charles Goodhart, who said a widespread banking crisis would require public money to be used to rescue banks.
(Reporting By Francesco Canepa; Editing by Catherine Evans)