On 11 April 2013, Michel Barnier, European Commissioner for Internal Market and Services, gave a speech on the EU’s long-term financing needs, during which he touched upon the current status of the Recovery and Resolution Directive (RRD) and EU banking reform.
M Barnier remains open to the introduction of the EU bail-in regime before 2018, its original start date. More to the point, he believes that the adoption of the main body of the RRD is “truly urgent” and should take place “within the next few weeks”. However, given that the EU Parliament is not scheduled to consider the RRD until its plenary session of 9 to 12 September 2013, this seems unlikely.
On the subject of the Single Resolution Mechanism (SRM) – comprising a single resolution authority and a common resolution fund – M Barnier confirmed that the EU Commission would present a legislative proposal in the summer of 2013 (probably in June). He also believes that the SRM can be established within the framework of current EU treaties. However, if this FT article is to be believed, Germany may insist that revision to EU treaties is necessary, a position which the UK will use in order to secure the repatriation of powers from the EU to the UK. If that proves to the case, EU banking reform risks being swallowed up in a political bun fight and we are unlikely to see its introduction any time soon.Contact Us