19 May 2005

ECB: Memorandum of Understanding on co-operation in financial crisis situations

The banking supervisory authorities, the central banks and the Finance Ministries of the European Union (EU) have agreed on a Memorandum of Understanding on co-operation in financial crisis situations. It shall enter into effect on 1 July 2005

Financial market integration and the growing number of crossborder financial institutions may increase the scope for crossborder contagion and thus the potential magnitude of a systemic crisis affecting more than one Member State. In this context, it is important to further enhance the practical arrangements concerning cooperation in crossborder crisis situations at the EU level among the authorities potentially involved in preserving financial stability.

Against this background, the MoU will apply to crisis situations with a potential for both crossborder and systemic impact affecting individual credit institutions, banking groups or banking components of financial groups, as well as to other possible systemic disturbances with crossborder implications in the financial markets, including those affecting payment systems or other financial market infrastructures.

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