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10 July 2013

Graham Bishop's Blog: Single Resolution Mechanism (SRM) - Commission proposal rejected by Germany but not the end of the world


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The Commission proposal - as expected - placed itself as the final decision-maker of when to put a bank into resolution.


This flows naturally - in my view - from the need to have an exisiting body that can exercise powers under the current Treaty. This may not be ideal in the long-run but provides a solution for 2015 and onwards. Any other approach runs the risk of being held hostage by the UK.

However, a second best solution is not the end of the world. I have argued repeatedly that a thorough Asset Quality Review by the ECB, follwed up by a stress test to ensure that banks are well-capitalised, should reduce the chances for several years of a major bank having to be resolved.

(More for Graham Bishop clients later)

Rolling Blog



© Graham Bishop


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