Final technical discussions to prepare the Commission's proposal for a European framework for bank recovery and resolution
As part of the final steps to prepare the forthcoming legislative proposal on the recovery and resolution of banks and investment firms, the Commission is engaging in discussion with key stakeholders on a number of outstanding points. These discussions are designed to lead to the swift adoption of the proposal, and to prepare the ground for its smooth negotiation during the legislative process. They will take place over the next four weeks and be based on a discussion paper focussed on the debt write-down tool (bail-in).
In early January 2011, the Services of DG Internal Market and Services invited views in response to its public consultation regarding the putting in place of an EU framework for crisis management in the financial sector. A broad range of issues was considered, from prevention and "early intervention" to bank resolution measures and financing arrangements. This consultation set out technical details of the framework outlined in the Commission's Communication of October 2010. The consultation closed on the 3 March 2011.
The Commission's Communication sets out the main elements that will be part of the Commission's legislative proposals next year, and is the result of extensive consultations over the past months (see IP/09/1549 ). Beyond the immediate priority of putting in place efficient crisis management arrangements in all Member States, the Communication also includes a "roadmap" providing a longer term view of some of the major challenges which will need to be overcome in order to ensure smooth handling of crises.
The new framework described in the Communication will be broad-ranging and aims to equip authorities with common and effective tools and powers to tackle bank crises at the earliest possible moment, and avoid costs for taxpayers.
The European Commission has adopted the 26th of May 2010 a Communication on Bank resolution Funds that proposes that the European Union establishes a EU network of bank resolution funds to ensure that future bank failures are not at the cost of the taxpayer or destabilise the financial system. Following discussion at the forthcoming European Council, the European Commission will present these ideas at the G-20 Summit in Toronto on 26-27 June 2010.
Such funds would form part of a broader framework aimed at preventing a future financial crisis and strengthening the financial system. The Commission believes that a way to achieve this is by introducing requirement for Member States to establish funds according to common rules into which banks are required to pay a levy. The funds would not be used for bailing out or rescuing banks, but only to ensure that a bank's failure is managed in an orderly way and does not destabilise the financial system.
- Press release (26.05.2010)
- Bank resolution funds : The Commission’s proposals (Slides)
- Text of the Communication (COM(2010) 254)
On 19 March the European Commission hosted a high level one-day conference on the construction of a new crisis management framework in the banking sector. The Internal Market Commissioner Michel Barnier set out his ideas on how to move forwards, followed by a number of eminent speakers and panellists from different backgrounds who expressed their views about what needed to be done.
The conference featured a mixture of keynote addresses and panel discussions. It was divided into three sessions:
- Early intervention: which new tools for supervisors?
- Making bank resolution effective across borders
- Bank insolvency framework: coordination or integration?
Date: 19 March 2010
- Alcide de Gasperi Auditorium,
170 rue de la Loi – 1000 Brussels, Belgium
Speeches and presentations
- Commissioner Barnier
- Sharon Bowles
- Jean-Claude Trichet
- Dominique Strauss-Kahn
- Giovanni Carosio
- Danièle Nouy
- Alessandro Profumo
- Paul Tucker
- Elisa Ferreira
- Maria Nieto
- Ádám Farkas
- Jörgen Holmquist
Videos of the Conference
Public Consultation regarding an EU framework for Cross-Border Crisis Management in the Banking Sector
On October 2009, the Commission Services invited views in response to its public consultation regarding the putting in place of an EU framework for crisis resolution in the banking sector. A broad range of issues was considered, from “early intervention”, when early remedial actions of banking supervisors aim to correct irregularities at banks and help them return to normal course of business, to bank resolution measures entailing the reorganisation of ailing banks with a view to safeguarding financial stability, the continuity of banking services and the revitalisation of the bank, to insolvency frameworks under which failed banks are wound up. The consultation closed on 20 January 2010.
In the context of its work on cross-border crisis management in the banking sector, the European Commission's Internal Market Directorate General has set up a group of experts in the field of re-organization, resolution and insolvency law in the banking and financial sector to assist in the preparatory work and development of an EU crisis management regime.
For any further information on this group please contact Silvia Scatizzi, Telephone:+ 32 2/296 08 81, Silvia.Scatizzi@ec.europa.eu