EU commissioner further clarifies bank resolution proposal

A spokesperson for the European Commission further clarified the proposal for a single resolution mechanism to manage the wind down of troubled banks today. The proposal has not yet been published in full.

Internal market commissioner Michel Barnier, speaking at a press conference following today's earlier release, said he was hoping for a quick agreement within a matter of months. He would not rule out a treaty change in the future, although European Central Bank policymaker Jorg Asmussen said yesterday that implementation of the SRM would be possible without a treaty change.

Although he stressed the need to end taxpayer-funded bail-outs, Barnier said that the use of public funds could not be ruled out once a bail-in had been triggered. He also said that EU resolution funds could also seek market financing.

Barnier added that the directive would have covered all bank crises in the EU over the past six years with the exception of Anglo-Irish.

The reaction from Germany has been scathing.

A spokesman for the German government said the proposal gives the Commission “a competence which it cannot have based on current treaties”. He added that the proposed new powers would require a treaty change which would delay the implementation of a banking union, and that the Commission should do what is possible under the current treaties.