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Photograph: freeimages.com/robert_driese

The European Union launched a new tool on Friday to help shore up the economy of the euro currency area, by introducing common rules to deal with failing lenders and protect taxpayers against the cost of future bank rescues.

The bank wind-down scheme is the second pillar of a crisis-thwarting banking union, alongside a single eurozone bank supervisor that was set up in 2014 to identify lenders in trouble at an early stage.

Under the new system, named the Single Resolution Mechanism, the banking industry is to stock up a common rescue fund with an overall 55 billion euros (60.1 billion dollars) over the next eight years. The fund will also be able to raise money on the markets.

Troubled lenders will be able to access the fund if they are unable to fix their financial problems on their own. The mechanism should enable swift decisions on how to tackle a failing bank, within a weekend if necessary.

Non-eurozone countries can also opt into the scheme, which is mandatory for the 19 members of the currency bloc.

"We now have a system for resolving banks and of paying for resolution so that taxpayers will be protected from having to bail out banks if they go bust," said EU Financial Services Commissioner Jonathan Hill.

"No longer will the mistakes of banks have to be borne on the shoulders of the many," he added.

The EU has been taking steps to build a banking union in response to the financial crisis that followed the collapse of US bank Lehman Brothers in 2008. At the time, European lenders received huge injections of public money to prevent their collapse.

Critics have argued, however, that the bank wind-down scheme will not go far enough to protect against future banking crises.

The European Commission wants to add a third pillar to the banking union: a European Deposit Insurance Scheme to ensure that depositors are reimbursed if their bank fails.

The EU's executive unveiled a proposal for the scheme last month but faces resistance, notably from Berlin, which believes that the timing is not right.

German banks have also opposed the mechanism, arguing that the funds they have put aside over years to guarantee their clients' deposits should not be deployed in other countries.

At present, national schemes exist to guarantee deposits of up to 100,000 euros.

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