EU Presidency amends BRRD compromise proposal

16 July 2013

The Presidency has reflected on the concerns raised by delegations and has decided to amend its compromise proposal. An explanatory note of the main changes, detailed in Annex 2, addresses issues such as the scope of the bail-in tool, and resolution financing arrangements.

Annex 2

I. Bail-in - Article 38

Introduction

Article 38 sets out a revised proposal on the scope of the bail-in tool. The proposal remains broadly in line with the flexibility model proposed by the Presidency during the ECOFIN of 21 June, with further clarity around existing discretionary exclusions, Commission ex ante approval, and the role of alternative financing arrangements.

Defined exclusions

The list of defined exclusions from bail-in in the ECOFIN draft has been retained, with one addition. The list has been expanded to so as to exclude inter-bank liabilities with an original maturity of less than one week (Art 38(2)(d)). This was agreed at the ECOFIN of 21 June following a proposal by the European Central Bank.

Flexibility – resolution fund use only after minimum bail-in

In line with the “minimum bail-in” model of flexibility proposed by the Presidency during the ECOFIN, Article 38(3c)1 has been expanded into a “general” discretionary exclusion.

Full compromise proposal


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