Brussels, 25/11/2013 (Agence Europe) - On Friday 22 November, the member states concentrated on governance and the scope of application of the single bank resolution mechanism based on suggestions from the Lithuanian Presidency that some countries described as provocative.
Although a large number of countries say that the European Commission should be the European institution that triggers bank resolution, Germany, the Czech Republic and Romania want the Council of Ministers to make that decision. In a move in the direction of Germany, the Presidency suggested that it should be the Council (either the Ecofin Council or an ad hoc Council formation, in both cases at ministerial level) that should endorse any draft decisions taken by the future resolution board.
The Netherlands suggested a hybrid solution with a stepped decision-making, but the Commission is not happy with the idea. For decisions involving use of the resolution fund, the Commission would have the decision-making powers. If a resolution process only involves the use of the resolution fund, the resolution board would be responsible, meeting in plenary. If a resolution process requires ex-post contributions to the fund or requires the fund to borrow money, then the Council of Ministers would make the decision. The Dutch government wants the legislation to go into more detail about calculating industry's contribution to the resolution fund.
For the scope of application, the Lithuanian Presidency suggests a system that is more in line with the German position, said a source. National authorities would prepare resolution plans for all banks (living wills), which would be drawn up at national level for local banks and at European level for large banks that impact severely on financial stability. This suggestion of a two-tier system has been recommended by Germany, described as provocative by Portugal, and backed by Belgium, Italy, France and Luxembourg. (MB/transl.fl)