EC Statement: Commission consults on the measures necessary for a new EU framework for crisis management in the banking sector
( October 20, 2009, 15:07 GMT | Official Statement) -- MLex Summary: The European Commission outlined possible measures to help regulators restructure failing banks in the future, including powers to transfer assets within a group across borders, and harmonise some insolvency procedures. The consultation paper also calls for a new framework to manage crises and wind up of failed banks, preferring private-sector funding but with "inevitably burden sharing" among governments. A memo of frequently asked questions follows the statement. The full consultation and a staff working paper are attached at bottom.The European Commission has adopted a Communication on an EU framework for crisis management in the banking sector. The purpose of the Communication is to consult as widely as possible on a broad range of issues aimed at safeguarding financial stability and the continuity of banking services in a cross border banking crisis. The Communication sets out questions on the tools that the Commission considers would be necessary for an EU crisis management framework. These tools range from “early intervention” action by banking supervisors aimed at correcting irregularities at banks, to bank resolution measures which involve the reorganisation of ailing banks, , to insolvency frameworks under which failed banks are wound up. The Commission’s consultation will last for three months, and will be followed by a public hearing to present the results and set out the Commission’s intentions....
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