The Commission's proposed bank resolution system shouldn't be bound by EBA decisions, lawyers for the EU's 28 Member States have said. The legal opinion puts a dent in efforts by the UK and Sweden to beef up the EBA's role in the SRM.
EU laws do allow the Brussels-based Commission to be subject to EBA decisions under certain conditions, the legal service of the Council of the European Union said in a November 13 opinion obtained by Bloomberg News. Yet the discretion required to make bank resolution decisions is very broad and therefore outside the EBA’s remit, the lawyers said.
“Since the role of the Commission in the context of the Single Resolution Mechanism is to make policy choices entailing a large margin of discretion, the EBA should not be in a position to adopt legally binding decisions affecting the manner in which the Commission exercises those powersW, the lawyers said.
EU treaties give precedence to institutions like the Commission over agencies like the EBA, to prevent the transfer of major responsibilities, the lawyers said. They also said that “there is nothing preventing the Commission from being guided by and taking into account the EBA guidelines and recommendations when exercising certain duties of a resolution authority".
Sweden and the UK have pressed for changes they say are needed to preserve a level playing field among EU Member States. In a November 4 discussion paper obtained by Bloomberg News, they requested a number of amendments to the resolution proposals aimed at applying EBA rules consistently inside and outside the eurozone.
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