EU Commission to Have Power to Resolve EU Banks?

The FT is reporting that, under the terms of a discussion paper currently under review in Brussels in relation to the single resolution mechanism (SRM), the EU Commission would be given the power to resolve EU banking institutions directly, with member states merely implementing Commission decisions.  This is in contrast to the agreement reached last week between France and Germany that the SRM should be run by a “resolution board” made up of national authorities (which itself when further than the original Germany vision of the SRM as a “network” of national supervisors).  The Commission also wants the resolution authority to have a single bank resolution fund as well as the power to borrow, using the “assets of euro area banks” as a guarantee and backstop.

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One thought on “EU Commission to Have Power to Resolve EU Banks?

  1. I am utterly confused by this idea. Wasn’t the ECB going to be given both SSM and SRM powers, or at least heading the resolution board? Would all bank assets now subject to seizure, confiscation, or taxation to backstop losses if other banks are insolvent?
    Probably it is not worth wasting too much time on specifically, just another half-baked Eurocrat idea destined for the dustbin, but useful in indicating what to expect as and if we move toward “ever greater union” and “deeper integration”, terms often used without enough detail!

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