Framework for the recovery and resolution of credit institutions and investment firms:
- extracts from the report by Gunnar HÖKMARK (EPP, SE)
EP Committee on Economic and Monetary Affairs
Lieu: Brussels, Belgium - European Parliament
End production: 06/11/2012 First transmission: 06/11/2012
Rapporteur Gunnar HÖKMARK (EPP, SE) has presented his draft report on the framework directive for the recovery and resolution of credit institutions and investment firms. The report consists of 140 amendments aiming to clarify the economic and financial conditions under which the bail in tool should be used, add new government stabilisation tools in case of a systemic crisis and introduce a clear separation between resolution funds and deposit guarantee schemes, amongst others.
Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
||Exterior shot of the EP, Brussels
||SOUNDBITE (English) Gunnar HÖKMARK (EPP, SE), Rapporteur: "I don't think that anyone can disagree on the need that, regarding banks, we implement the rules so that not only the profits, but also the losses, should go to the owners. And I have noted that there is rather common ground for that, there is no socialist, no liberal, no conservative, no Christian democrat in disagreement with that. I think this is also a way of designing what is a common problem and just by doing that I think we have also started a process of finding the common solutions".
||SOUNDBITE (English) Gunnar HÖKMARK (EPP, SE), Rapporteur: "We have a Union that we shall take care of. It has taken a lot of struggle, political as well as economical, to come where we are today, and I think it's important to avoid fragmentation and we will never get a better supervision, better stability if we are fragmenting the Union and I think this directive, this framework, is an important cornerstone in that effort and I think we should all put as much seriousness and effort into that as possible".
||SOUNDBITE (English) Gunnar HÖKMARK (EPP, SE), Rapporteur: "When we are ready with this legislation and this framework of a 'single rule book' there should be no banks that are too big to fail. Hopefully, no banks will fail, but in the end we know that banks will fail. Then we need to have a stable system, a stable legislation that can make it a reality that even big banks can fail. Because when that happens, not only that we have revived the capitalism with the help of socialists, conservatives, liberals and Christian democrats and all other political groups, but that does also mean that the responsibility on how to act is in the hands of the shareholders and the managements on the individual banks, and that has a certain special preventive effect that I think hopefully can be the best of the new characters of the banking market of the EU".
||SOUNDBITE (English) Gunnar HÖKMARK (EPP, SE), Rapporteur: "This is a way of clarifying when is acceptable for the state to intervene and when is not. Because in reality, when we have a banking crisis, and an economy of a member state is in a deep crisis and have deep problems, the cost and the demands for a public intervention will be there. And sometimes that will be the only way to fight the fear and to regain the confidence and the credibility".
||SOUNDBITE (German) Wolf KLINZ (ALDE, DE): "All banks and investment companies in the EU will be covered by this directive so we have to ask ourselves to what extent, under the subsidiarity principle, the various member states should set how often these types of resolution plans should be carried; is it up to a central resolution authority or is it up to the member states... so how it will be done?"
||SOUNDBITE (German) Wolf KLINZ (ALDE, DE): "The question is: how big should the bail instrument be? In the discussion we had with people from the University of Frankfurt they said 5%, and that being 5% of total losses, and not only of risk assessed assets".
||SOUNDBITE (English) Pilippe LAMBERTS (Greens-EFA, BE): "I do not say why we have to wait and wait and wait again for further texts to come. We have the text on the table. This is an opportunity to do the thing right and I believe that we should take the opportunity to re-stress the need for, not just a system of resolution authorities or a system of deposit guarantee schemes, or a system of resolution funds, but to go for an integrated resolution authority, an integrated resolution fund and an integrated deposit guarantee scheme."
||Cutaways (7 shots)