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: Continue reading →
On 4 February 2014, the EU Parliament published a press release on the latest negotiations over bank resolution.
As previously reported (see this blog post for more detail), negotiations over resolution funding seemed largely to have reached an impasse. However, yesterday’s tone seems somewhat more conciliatory in nature. Continue reading →
The Conference of Presidents Group have held intensive talks with their EP negotiators on the state of SRM play. The result is firmly-worded missive sent today from their own current President, Martin Schulz, to Commission President Manuel Barroso, summary translations in bold italic: Continue reading →
On 11 December 2013, the European Commission published a press release containing remarks made by Michel Barnier, European Commissioner for Internal Market and Services on EU banking structural reform. Mr Barnier stated that the legislative proposal on EU banking reform will be presented at the beginning of January 2014. Following the recent publication of the Volcker Rule on 10 December 2013, the Commission will also look at the details of this new rule (see this blog post for more details). For certain banks deemed too big to fail, he explained that the EU banking reform proposal will consider separation, calibration and treatment of the risks taken by these banks.
Yesterday’s meeting of finance ministers in Brussels failed to establish crucial details over bail-in according to the Financial Times. The negotiations did produce a draft compromise broadly based on Germany’s revised position (see this blog post for more details). The financing details will be left to an emergency meeting on the eve of the next EU summit in Brussels on 19 December 2013. In the event Brussels rejects the board proposal, the plans would need the approval of the European Commission or a majority vote of banking union member states.
An article in today’s Financial Times reports that, today’s meeting of finance ministers in Brussels is expected to make further progress on the creation of a single banking framework union. Following a meeting of key countries and EU officials in Berlin last Friday, unsubstantiated reports that France and Germany were resolving ongoing differences and a deal was close to completion emerged. Continue reading →
On 28 November 2013, the Presidency of the EU Council published its latest Compromise Proposal (17055/13) with respect to the Single Resolution Mechanism (SRM). Changes to the previous compromise text (15503/13) are highlighted in bold and underlined.
The ECB has published its legal opinion on the Single Resolution Mechanism (SRM), a short summary follows:
The SRM should include all EU credit institutions
Resolution should only be triggered by a supervisory assessment of “failing or likely to fail”
The SRM should not require new legislation, Article 114 of the Treaty should suffice as a legal basis
The ECB supports early implementation of the bail-in tool (currently 2018)
Resolution financing must be provided by the Single Bank Resolution Fund. The ECB proposes a “temporary, fiscally neutral backstop” to the SBRF in the form of a credit line supplied by Member States, but recoupable from the financial industry
The ECB seeks representation as an observer in all plenary and executive meetings of the Single Resolution Board
The opinion voices its full support for the SRM which it views as a necessary complement to the Single Supervisory Mechanism, although it considers it crucial that the responsibilities of supervisory and resolution authorities are kept distinct. The ECB regards a fully-functioning single supervisory mechanism as a vital precondition for the establishment of the SRM, it therefore strongly supports adoption of the SSM legislation during the Parliament’s current term. This being the case, the ECB voices its support for the SRM to become effective as of 1st January 2015.
The 32 page opinion contains little that is unexpected; it is notable though, for its bullish tone on scope and timing of implementation. Perhaps it may be unwise to rely on delay.