Brussels, 15/10/2014 (Agence Europe) - Discussions are at full speed between the European Commission and the member states on the contributions to be made by the European banks to the national resolution funds from 2015 and, for Eurozone banks, to the Single Resolution Fund (SRF) from 2016.
Several national delegations, such as France, Ireland and Luxembourg, are arguing against any excessive distortion in the application of the BRRD and of the SRM regulation bringing in a single resolution mechanism for the countries of the Eurozone (EUROPE 11162).
“At the moment, we are talking about how to limit distortions”, which are currently “substantial”, said one diplomat, stressing that a European legislation safeguard clause specifies that the banks of a Eurozone country participating in banking union will not pay disproportionately more than those only covered by the BRRD directive. The diplomat went on to state that “it is a budgetary discussion, it is tense. If one pays, another pays less”.
A European Commission document dated early October compares the banking contributions at national level depending on whether the specific execution measures under the 'SRM' regulation or those of the 'BRRD' directive are applied. Of the Eurozone countries whose banks would pay more, the distortion would be 344% Luxembourg, 150% for Ireland and 68% for France. Other countries in the Eurozone, on the other hand, would see the contributions of their banks fall. This would be the case for Slovenia and Slovakia.
“We would not have these problems if we didn't have this compartmentalised system” for the SRF, said a European Parliament expert. In the first eight years of its existence, the Single Resolution Fund will be made up of national compartments fed into by the banks established in a given country. The amounts will be gradually pooled (40% from 2016, 60% in 2017). The banking contributions system is designed to evolve. Once the rules have been agreed upon, the Single Resolution Council, the future European authority which will govern the SRF, will have the option to modulate them in the margins of one year to another.
Banking contributions were on the agenda of the Ecofin Council, held in Luxembourg on Tuesday 14 October. No ministers took the floor on the issue. The European Commission said that it plans to present the two application measures of the SRM regulation and the BRRD directive on Tuesday 21 October. (MB)