"Eventually, an agreement should be found at EU27 level: this is an important component to complement the architecture of an integrated financial system."
Translated from the French
The main topic today was how to finance banking resolution. This is a highly complex subject matter, but under the leadership of the Irish Presidency we have come closer to an agreement. I am confident that such an agreement will be concluded - not tonight, but soon.
The debate focused on how, in case a bank finds itself in serious difficulties, the creditors could be made to contribute whilst avoiding the use of public funds or the taxpayers' money. We need a clear hierarchy for any bail-in whilst allowing flexibility for national resolution authorities. This hierarchy should be tightly regulated. We are not a federal system; we have over 8,000 banks and very different banking models so a certain amount of national discretion is required. For the Commission, however, it is essential that this national flexibility does not affect the integrity of the common market.
Another of our main goals is to avoid a situation in which a level playing field becomes so 'unlevel' that those countries who can afford it can count on a bail-out whereas the others end up with a bail-in. The positions of the various states are difficult but not impossible to reconcile, which is why I remain confident that an agreement can be found with the Council in the near future.
This agreement on how to finance banking resolution is essential to start negotiations with the European Parliament which is impatient to begin the trialogue. It is also important because we need to move forward on realising a banking union - this is an urgent matter.
Eventually, an agreement should be found at EU27 level: this is an important component to complement the architecture of an integrated financial system. The proposal that I will make in a few days on a single resolution mechanism will be de facto an effective implementation of this Directive, just in a more integrated way for countries that share the euro. With the essential agreement on the stability mechanism, these elements complement the banking union, and help break the link between sovereign funding and the banking sector.
Full press release (in French)
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