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European policymakers agreed Thursday to complete a banking union with an agency to shut failing eurozone banks, but there will be no joint backstop for a fund to pay the costs of closures.It completes the second pillar of banking union, starting at the end of the year when the European Central Bank takes over as watchdog.Thursday's accord makes it harder for EU countries to challenge the ECB if it triggers bank closures and establishes a common 55 billion euro backup fund over eight years – quicker than planned but far longer than the ECB's watchdog had hoped.Under the deal reached, a fund made up by levies on banks will be built up over eight years, rather than 10 as originally foreseen. Forty percent of the fund will be shared among countries from the start and 60 percent after two years.The fund will be able to borrow against future bank levies but will not be able to rely on the eurozone bailout fund to raise credit.Were banking union in place, this situation would be little different.
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