"Crisis resolution - both comedy and tragedy" – Sharon Bowles MEP

Following the publication today by the European Commission of the Bank Crisis Management Directive, Sharon Bowles MEP, who chairs the European Parliament's Economic and Monetary Affairs Committee, welcomed the long overdue proposals but fears current events may take over.

The European Parliament called for crisis management and resolution as part of the European Financial Supervisory Architecture over two years ago, notably through the 'Ferreira resolution' of July 2010.⃰

Sharon Bowles MEP said:

"In both comedy and tragedy timing is everything. The proposal we have today may be useful for the future but it does not solve the current problems we face, and frankly should not be held as such. In the long-term, I have no doubt that we will want to build an effective and strong crisis resolution scheme within a pan-European framework.

"In the short-term we need further measures, such as forcing banks to develop living wills and involving the European Banking Authority better. Parliament wants to embed such requirements in the capital requirements legislation on the table (CRD IV). We cannot wait an extra two and a half years for the crisis management legislation to be negotiated and implemented - its implementation date is January 2015!

"The massive capital interventions of these days need to look to a European or Eurozone level for both assessment and funding. Meanwhile, it could be clarified that the collective deposit guarantee schemes over the EU act as reinsurance for any Member State scheme. Over time these could be treated as loans, but collectively they are large enough to prevent runs from insured depositors and also protect the Single Market of branches and subsidiaries."

ENDS

⃰Note to Editors:

EP resolution calling for bank crisis management legislation and making recommendations (July 2010): http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P7-TA-2010-276

Press release on adoption of EP 2010 resolution: http://www.europarl.europa.eu/sides/getDoc.do?language=en&type=IM-PRESS&reference=20100621IPR76412

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