Brussels, 24/03/2014 (Agence Europe) - Several lobby groups have welcomed the agreement reached by member states' representatives and MEPs on the bank resolution mechanism (SRM) for the eurozone that will make it easier to wind up failing cross-border banks from 2015 onwards.
SRM includes the creation of a European resolution board, comprising representatives of the competent national authorities and European figureheads (see EUROPE 11043). The board will draw up bank resolution plans for banks supervised directly by the ECB from November 2014 onwards when it becomes the eurozone's bank supervisory body. A bank resolution fund (SRF) will be set up in 2016, firstly on an intergovernmental basis, and will have €55 billion by 2023. It will be gradually mutualised (pooled) and be governed by the Community method eight years after it is set up.
The European Banking Federation (EBF) said: “This historic breakthrough provides improved clarity and efficiency for the decisions to be made under the new mechanism that determines whether Eurozone banks need to be placed into resolution”. Guido Ravoet, EBF chief executive, commented: “For banks in Europe it is important to have an efficient decision-making process for resolving a bank. Clarity is essential in order to minimise the impact of a bank failure and avoid the need for taxpayer support”. The EBF does not see why the system cannot apply to all banks and it warns of an uneven playing field within the single market between eurozone banks that are part of banking union and the other European banks because the first group will have to contribute to the SRF for eight years, although the BRRD directive harmonising member states' bank resolution funds, which applies to all EU banks across the board, gives banks ten years to contribute to national resolution funds.
French banks want a “fair” solution to be found to the problem of industry contributions to SRF. The French bank federation says the calculation methods have to be risk-based in order to avoid an unfair bearing of the burden among different countries' banks and the unfair playing field this would cause. It says that French banks take a cautious approach to risk-management and must not be penalised by having to pay a disproportionate amount into the SRF.
BUSINESSEUROPE President Emma Marcegaglia said the agreement would be decisive for financial stability and financing of the economy, but European employers would have preferred “a stand-alone resolution authority, with more independence from national political interests”. (MB)