On 19 February 2014, the EU Council published a press release reviewing the state of play of negotiations over the single resolution mechanism (SRM).
Committed to reaching agreement over the SRM before the upcoming parliamentary elections, EU finance ministers had met the previous day in order to discuss possible adjustments to the Council’s December 2013 general approach to the SRM, with a view to giving more flexibility to the presidency in the forthcoming “trilogue” negotiations. Wiggle room was noted as existing in the following areas:
- the framing of the role of the plenary session of the single resolution board (SRB);
- a review of the thresholds for the involvement of the plenary, and of voting arrangements, especially during the initial transitional phase of the single resolution fund;
- a possible better framing of the Council’s role in order to limit its discretion and the grounds on which it can raise objections to the SRB’s decisions, as well as a simplification of the decision-making process;
- more closely regulated oversight of the SRB over national resolution authorities;
- a central role for the European Central Bank in determining whether a banking institution is failing or likely to fail (still recognising that the SRB should ultimately also maintain an ability to influence that decision);
- agreement that bail-in and not bail-out is the main guiding principle for bank resolution.