Historic vote today in the European Parliament completes the Banking Union: as well as banking supervision by the ECB, now failing banks will also be tackled at European level.
“The Banking Union will contribute to regaining trust in the banking sector and thereby to economic recovery in the EU. These rules on financial stability will help restore banks' ability to provide credit to the real economy and our SMEs", stated Corien Wortmann-Kool MEP, EPP Group Vice-Chairwoman and one of the main negotiators of the so-called Single Resolution Mechanism (SRM).
The EPP Group managed to establish strong provisions to prevent national taxpayers bearing the losses of failing banks. “This is an important lesson we have learned from the crisis: shareholders and creditors must bear the losses of failing banks, not taxpayers. The position concluded by the Finance Ministers in December was not ambitious enough, leading to more involvement of Member States in individual resolution cases. The European Parliament successfully managed to reduce this political interference. This ensures that banks are treated in the same way across Europe and that painful, but necessary, restructuring measures such as bail-ins are really put into practice”, added Wortmann-Kool.
The Bank Recovery and Resolution Directive adopted today will lay the groundwork for a stable European banking sector and set the rules for all 28 Member States as well as the Banking Union. “This means that Europeans will have dynamic banks and a stable banking sector”, said Gunnar Hökmark MEP, Vice-Chairman of the EPP Group. Hökmark led the work on vast legislation on the recovery and resolution of credit institutions and investment firms for the European Parliament
The deal also includes updating the Directive on deposit guarantees. It harmonises the way in which national schemes are applied, for instance in terms of the level of protection and the maximum number of days it may take to compensate the depositors in the event of a bank being put in liquidation.
Deposits up to €100,000 will be guaranteed by funds contributed by banks.
The EPP Group is by far the largest political group in the European Parliament with 274 Members from 27 Member States.