Before the participation of the negotiation team of the European Parliament for the Single Resolution Mechanism we issued a common press release:
Single bank resolution mechanism and fund:
Key principles for successful negotiations
Member States must seize the opportunity of this week’s ECOFIN to allow real negotiations to begin with Parliament on the single bank resolution mechanism, including the single fund. The lead MEPs have highlighted their key criteria to ministers stressing that these elements would allow for taxpayer protection, a swift and efficient decision making process, and equal treatment of banks.
The EP negotiators reiterate their strong resolve to reach a compromise with Council during the current electoral mandate. But such a compromise must be a ‘good’ one if the main objectives are to be reached. This means that the following principles, among others, should be ensured:
a. Decision making on individual resolution cases must be credible, efficient and predictable. This regards all resolution tools including application of bail in and – where needed – the use of the single resolution fund. As such, the political interference through the involvement of Member States should be avoided since it adds complexity, slows down the processes, and inevitably leads to power-politics which will undermine equal treatment between banks.
b. The Single Resolution Fund must be single and equally accessible from the start. The contributions will come from banks and should therefore not be considered as belonging to one Member State or another. The ‘national compartments’ of the Council model creates an un-level playing field. Council’s mechanism also allows taxpayer money to be brought in before exhausting the fund, which goes contrary to the very objective of the SRM. To enable credibility, a repayable loan facility should be established from the beginning of the building up of the Fund.
c. The resolution mechanism will rely on the Single Rule Book established in the bank recovery and resolution directive (BRRD) so as to ensure a level playing field between participating and non-participating Member States.
d. The legal framework on which to base the mechanism and fund is the Regulation. As such all issues must be open to discussion within the trialogues.
Parliament cannot accept to sign up to a system which could fail its first tests because this will keep taxpayers at the forefront of paying for bank risks and develops a system of privileged and under-class banks based on national affiliation, thereby undermining the essence of the single market.
The lead negotiators for the European Parliament are Elisa Ferreira (rapporteur) (S&D, PT), Corien Wortmann-Kool (EPP, NL), Sylvie Goulard (ALDE, FR), Sven Giegold (Greens, DE), Vicky Ford (ECR, UK), Thomas Händel (GUE/NGL, DE), Sharon Bowles (committee Chair) (ALDE, UK).