With the draft report at the European Parliament having been scrutinised in committee for the first time on 16 October (see EUROPE 11884), the experts of the financial services working party of the Council of the EU met on Wednesday 25 October to continue their work on the proposed regulation on a recovery and resolution framework for central counterparties (CPPs).
The legislative proposal, presented at the end of November 2016, aims to complete and govern the recovery and resolution of CCPs (see EUROPE 11677) by adding new rules similar to those in place for banks under the BRRD directive and based on international standards.
According to the working document, of which EUROPE has had sight, there is no unanimity among the member states on the decision-making process proposed by the Commission. The legislative initiative provides for each central counterparty to create a college of resolution authorities involving all competent authorities, including the European Securities and Market Authority (ESMA) and the European Banking Authority (EBA), to carry out the necessary preparatory and resolution actions.
According to the document, certain member states would prefer the EBA's involvement to be limited to colleges of CCPs holding banking licences. Others consider that the EBA could provide the benefit of its general experience of resolution and, more broadly, represent the viewpoint of the banking supervisors, which are not represented within the college.
Additionally, the document states (without naming names) that one member state believes that this would make ESMA's resolution committee, as proposed, “superfluous”, as it comprises members of the resolution college.
The Council's discussions are more advanced on another point, however: the use of public stabilisation instruments, which is authorised by the Commission's text, subject to certain conditions. On this point, the Presidency of the Council of the EU proposes to set a high level of justification for these tools to be used, to ensure that they are genuinely last-resort resolution tools, so that the parties to the process do not postpone their contributions in the hope that the state will intervene, allowing them to avoid losses, the document states. (Original version in French by Marion Fontana)