The European Commission has today published its long-awaited proposals to create a common framework for dealing with troubled banks.
The measures set out to ensure that in future taxpayers are not burdened with the costs of bank failures. They provide for the creation of clear guidelines for regulator-intervention and for a degree of cross-border assistance between resolution funds.
Kay Swinburne, ECR spokesman on Economics and Monetary Affairs, said that the proposals were not before time: “This is something which should have happened immediately after the banking crisis first arose. Failing banks were the trigger of the 2008 crisis and a mechanism for dealing with cross border banking failures should have been thoroughly thought-out and in operation by now.
“The Commission should have concentrated on the key challenge of formulating recovery and resolution plans for banks years ago, instead of proposing politically-motivated legislation on things such as short-selling and hedge funds. Don´t waste time rearranging the furniture when you need to make sure the roof won’t fall in.
“However, it is important that the ideas on Banking Resolution Funds and a wider Eurozone Banking Pact put forward by (ECB President) Mario Draghi last week, and later amplified by (Eurozone President) Herman Van Rompuy, should be looked-into separately. This should relate to the Eurozone countries only and not to the whole EU.
“They need to be careful not to complicate the Eurozone’s crisis by tying countries outside the currency union into measures drawn up to tackle the problems of those inside it.”
Commission press release: europa.eu
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