EU Parliament Sets its Sights on RRD Early Intervention Powers

The RRD needs to focus less on the issue of individual failing banks and more on ways to resolve a general banking crisis, according to an EU Parliament press release published on 6 November 2012.

In addition, the next priority should be to clearly define the point at which resolution is triggered and control of an institution passes from its management to resolution authorities.  According to the EU Parliament, there must be no “grey zones” as to who is running a bank.

Beyond this, the question of resolution financing must be also addressed.  Clear rules, which allow the use of public funds only once shareholders have been wiped out, should be established.  These arrangements should be supported by the creation of a resolution fund, financed by way of ex ante industry contributions.

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