Commission to present bail-out fund contributions
How the Commission calculates contributions to the eurozone bail-out fund is controversial as it could lead to banks from some member states paying much more than similar-sized banks in other member states.
by Nicholas Hirst on 19.07.2014 / 10:00 CET
The European Commission will appear before MEPs on Tuesday (22 July) to explain how it intends to calculate the contributions of individual banks, such as Deutsche Bank, BNP Paribas or BVBA, to a €55 billion eurozone bank bail-out fund that will be responsible for future bank rescues.
Michel Barnier, the European commissioner for internal market and services, told European Union finance ministers on 8 July that the Commission would take two main factors into account: the size of a bank’s balance sheet and the riskiness of the assets it holds. Yet much will turn on how the Commission balances these two aspects.
But Green MEPs have already voiced concern that the Commission is reducing the costs of the system for “casino banks”, by giving too much importance in its calculations to the size of a bank’s balance sheet and not enough to the riskiness of its assets. This would increase the contributions to be made by less risky institutions such as building societies and credit unions.
Sven Giegold, a German Green MEP, told European Voice that the Commission had given into pressure from the Italian, Dutch and French governments. “These countries are defending the interests of certain [riskier] banks” over those of borrowing banks, he said.
The Commission’s methodology for calculating the contributions will be adopted as delegated acts, implementing an agreement on banking union struck earlier this year.
MEPs, many of whom vocally criticised the fund as too small and its decision-making as too politicised, have said that they will carefully monitor that the delegated acts respect that agreement.
The Commission will present its final proposal in September. It is also expected to propose a reduced contribution for smaller banks that are unlikely to pose a systemic risk to the banking system.
MEPs do not have the power to amend the proposal, though they can reject it.