On 25 May 2012, the EU Commission released an agenda document detailing its proposal for bank recovery and resolution, to be published on 6 June 2012. The key elements of the proposal are:
- The proposal will be based on prevention and reducing the risk of bank failure, a key aspect of which will be the power to intervene at an early stage before problems within a bank become critical;
- National authorities and the European Banking Authority will have appropriate tools to ensure coordination of procedures, particularly with respect to cross-border banking groups;
- The framework will provide for credible resolution tools, including “bail-in” measures; and
- Sufficient funds should be available to finance resolution, but this should focus on ensuring the continuity of critical functions and not bailing-out failing institutions.
The agenda document is available here.