Commission: New proposal for centrally managed bank resolution

Michel Barnier, Member of the EC in charge of Internal Market and Services, participated in the public hearing on financial supervision in the EU which was organised in Brussels. (EC Audiovisual Services, 24/5/2013).

Michel Barnier, Member of the EC in charge of Internal Market and Services, participated in the public hearing on financial supervision in the EU which was organised in Brussels. (EC Audiovisual Services, 24/5/2013).

The European Commission is about to honour once more its title as ‘Guardian of the Treaties’. This fundamental Commission’s mandate obliges the EU’s executive to always promote more rather than less Union. In this respect after the French President Francois Hollande and the German Chancellor Angela Merkel agreed in Paris last week, to support a loose banking union with a dispersed in 17 Eurozone capitals the bank resolution mechanism, the Commission is about to come up with a new proposal to undertake itself this role. In this way Brussels will safeguard the central and effective character of the resolution authority.

Around this key issue there are now two well-formed camps. On the one side Germany and its close followers back a loose banking union, now supported half-heartedly by France. On the other side of the fence are firmly placed the European Central Bank and the Commission. ECB says that a banking union without a central and strong bank resolution authority cannot act as catalyst in transmitting effectively its monetary policies for cheap borrowing to all the 17 member states. In view of this the ECB has opposed Berlin’s proposal for an ineffective and dangerously decentralised bank resolution mechanism.

The Commission

In this affair the European Commission is the most fervent supporter of a strong banking union with a central bank resolution mechanism. Michel Barnier, Member of the European Commission in charge of Internal Market and Services has been supporting this option from the very beginning. According to information carried by major news agencies, he is expected today to submit to the College of Commissioners a new proposal bestowing to the EU’s executive the task of resolving and recovering failing banks.

The Commission has proved its abilities in this field on the occasion of the recent incident of the resolution and recovery of two Cypriot banks. In a paper entitled, “A new Financial System for Europe”, Barnier has described in detail his proposal for a central Single Resolution Mechanism for failing banks. This proposal is termed as a pending one by Barnier, probably to be presented today in the College. The Commissioner states that “in addition to the regulatory and supervisory framework applicable in the whole EU, the shared responsibilities and cross-border links within the euro area require specific measures to sustain confidence in the single currency. In particular, a banking union is necessary to break the harmful connections between sovereign debt markets and banks”.

In its long-term planning of the Banking Union and safeguard the euro, the Commission states that the deeper finacial integration is compulsory and of existential importance for the euro area. It should be built on a single rule book of crisis prevention, management and resolution and deposits guarantees for all banks. Given this, it is more than certain that the Commission will not forfeit its long-term planning for an opportunistic agreement between France and Germany.

The Commission’s proposal on recovery and resolution tools for banks in crisis is a key pillar of the new financial regulatory framework that refers to all banks of the European Union. On top of that the practice to make taxpayers pay for the failing banks is self destructive and doesn’t offer a viable solution for the future of the euro area. In view of that the Commission wants to make sure that the taxpayer does not always end up bailing out banks. To avoid this Barnier proposes a common framework of rules and powers to deal with banks in difficulty to be set up by 2015 or earlier. Repeated bailouts of banks have increased public debt and imposed a very heavy burden on government budgets. The euro area cannot survive like that and the Commission is there to see that this is avoided.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

European Commission and four online marketplaces sign a Product Safety Pledge to remove dangerous products

#Travelgoals: why Instagram is key to understanding millennial tourism

Stateless Rohingya refugee children living in ‘untenable situation’, UNICEF chief

“The Belt and Road Initiative aims to promote peace, development and stability”, Ambassador Zhang of the Chinese Mission to EU highlights from European Business Summit 2018

Myanmar: New UN envoy offers to serve ‘as a bridge’, recognizes ‘positive steps’ over Rakhine state

How Africa’s entrepreneurs are changing the direction of globalization

Africa’s future is innovation rather than industrialization

ECB: Growth measures even before the German elections

International Day of the Midwife: 5 things you should know

Quantum leap: why the next wave of computers will change the world

Norway has successfully enforced its foreign bribery laws but faces potential obstacles

Viktor Orbán, Hungarian Prime Minister, at a 2015 event in Brussels, Berlaymont. (Copyright: European Union , 2015; Source: EC - Audiovisual Service; Photo: Lieven Creemers)

Hungary and Ireland build front to say no to EU tax harmonisation plan

Can cybersecurity offer value for money?

Lifting the lid on the value of a company’s human capital

Why impoverishment and social exclusion grow in the EU; the affluent north also suffers

There isn’t a single country on track to make the UN’s targets for gender equality

Yemen agreement to end southern power struggle ‘important step’ towards peace: UN Special Envoy

Ten UN peacekeepers killed in a terrorist attack in northern Mali

Wednesday’s Daily Brief: Guterres in Kenya, Prisoners sick in Iran, #GlobalGoals, Myanmar, Ukraine updates, and new space partnership

EU Commission: Once in every 20 beef meals you eat…horse probably with drugs in it

The European brain drain and the deteriorating medical workforce

GSMA Mobile 360 – Africa: Rise of the Digital Citizen, Kigali 16 – 18 July 2019, in association with The European Sting

Deeper reforms in Germany will ensure more inclusive and sustainable growth

US migrant children policy reversal, still ‘fails’ thousands of detained youngsters: UN rights experts

Germany: A grand coalition may trouble employers and bankers

Worldwide consumer confidence has shot up to its highest level for four years according to a survey of 130 Global Retail leaders

The Commission unsuccessfully pretends to want curbing of tax evasion

EP Brexit Steering Group calls on the UK to overcome the deadlock

More bank bailouts at taxpayers’ expenses

The ephemerality of the public-private health boundary

FROM THE FIELD: Finding refuge in the ‘beautiful game’

Eurozone to enter the winter…

‘Cataclysmic events’ in Hiroshima, Nagasaki, began ‘global push’ against nuclear weapons says Guterres, honouring victims

Drugs cost too much. There is a better way to fund medical innovation

Primary Healthcare vs Specialization Careers, how to promote PHC to the Young Health Workforce?

One Health approach to combating Antimicrobial Resistance – how can professionals from different backgrounds unite in this common fight?

Why gin made from peas helps the environment

The Monetary Union drives Europe into dangerous paths, CoR demands an EMU of regional content

The Netherlands is paying people to cycle to work

Voice tech and the question of trust

Despite lagging in the Global Goals, Africa can meet the 2030 deadline: Rwandan President

Tackling youth unemployment through the eyes of a European entrepreneur

UN chief welcomes formation of unity government in Madagascar

Boat made of recycled plastic and flip-flops inspires fight for cleaner seas along African coast

Praising Roma’s contributions in Europe, UN expert urges end to rising intolerance and hate speech

Will the European Court of Justice change data privacy laws to tackle terrorism?

Mental health: a medical school’s demand

Nearly $4 billion needed to protect 41 million children from conflict and disaster

Europeans are living beyond Earth’s means

Addressing the consequences of digitalisation in the Russia & CIS region

MEPs reject making EU regional funding dependent on economic targets

This project is turning abandoned fishing gear into volleyball nets

UK’s Cameron takes the field to speed up TTIP talks. Will “rocket boosters” work?

Food safety: New rules to boost consumer trust approved by MEPs

Managing and resolving conflicts in a politically inclined group of team members

Brexit talks stalled at launch; issues with European Court’s authority in Britain

“If the job market doesn’t exist, then even the most brilliant Youth Guarantee cannot ensure a job to these young people”, European Youth Forum Secretary General Giuseppe Porcaro on another Sting Exclusive

The role of students in a migration crisis in Roraima, Brazil

More refugees being helped by family, work and study permits, finds OECD and UNHCR study

MEPs demand Bulgaria’s and Romania’s swift accession to Schengen area

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s