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EU Commission to Propose New Framework for Bank Recovery and Resolution on 6 June 2012

On 25 May 2012, the EU Commission released an agenda document detailing its proposal for bank recovery and resolution, to be published on 6 June 2012.  The key elements of the proposal are:

  • The proposal will be based on prevention and reducing the risk of bank failure, a key aspect of which will be the power to intervene at an early stage before problems within a bank become critical;
  • National authorities and the European Banking Authority will have appropriate tools to ensure coordination of procedures, particularly with respect to cross-border banking groups;
  • The framework will provide for credible resolution tools, including “bail-in” measures; and
  • Sufficient funds should be available to finance resolution, but this should focus on ensuring the continuity of critical functions and not bailing-out failing institutions.

The agenda document is available here.

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