15 October 2009

European Council conclusions on strengthening EU Financial Stability Arrangements

The Council has recently been stressing the need to move forward to ensure that progress is made in parallel with the ongoing work on the EU supervisory framework, and to strengthen the mechanisms for policy co-ordination in crisis management.

The Council has recently been stressing the need to move forward to ensure that progress is made in parallel with the ongoing work on the EU supervisory framework.

 

4. The Council has emphasised the importance of:

• significantly enhancing the EU regulatory framework for crisis prevention, management and resolution by developing common and inter-operable tools to improve Member States' ability to adequately handle a financial crisis. The Council INVITES the Commission to further review the home-host arrangements for branches under the EU single passport.

• developing a comprehensive EU-wide framework for closer policy co-ordination on financial stability, in particular, to deal with a cross-border financial crisis, while taking into account the respective responsibilities of EU bodies/institutions/committees and national authorities participating in the process, and building on the following elements:

– stronger prevention policies and the efficient and timely assessment and prioritisation of risks, including EU-wide stress tests on a regular basis, in addition to the tests carried out by national authorities;

– the full implementation of the 2008 MoU, taking into account the lessons from the current crisis and the new EU supervisory system;

– strengthened mechanisms for policy coordination in crisis management among Member State governments in line with Treaty obligations;

– the need to develop credible alternatives to public support, notably by facilitating winding-down of cross-border financial groups, including the development of firm-specific contingency planning and resolution plans.

 

The conclusions endorse the ECOFIN roadmap on all the financial regulatory issues currently being proposed by the Commission. In the roadmap the Adoption of the general approach on the macro prudential framework (ESRB) is scheduled for October 2009, while the general adoption of the micro – prudential framework is planned for December 2009.

 

Council conclusions