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BRRD
"I welcome the trilogue agreement reached tonight between the European Parliament and EU Member States on the Bank Recovery and Resolution Directive. This is a fundamental step towards the completion of the Banking Union.
This law, which applies to all 28 Member States, is an essential piece of the financial regulatory framework that we are building piece by piece for all banks of the European Union in order to draw the lessons from the crisis. Ensuring that failing banks can be wound down in a predictable and efficient way with minimum recourse to public money is fundamental to restoring confidence in Europe's financial sector. The Single Resolution Mechanism, once in place, will be the authority applying these new rules in the context of the Banking Union.
With these new rules in place, massive public bail-outs of banks and their consequences for taxpayers will finally be a practice of the past.
The new rules provide authorities with the means to intervene decisively both before problems occur and early on in the process if they do. If, despite these preventive measures, the financial situation of a bank deteriorates beyond repair, the new law ensures that shareholders and creditors of the banks have to pay their share. If additional resources are needed, these will be taken from the national, prefunded resolution fund that each Member State will have to establish and build up so it reaches a level of 1% of covered deposits within 10 years. All banks will have to pay in to these funds but contributions will be higher for banks which take more risks.
The EU Heads of States and Governments have repeatedly recalled the necessity to agree these rules, as well as the reinforced framework for national deposit guarantee schemes, before the end of the year. I trust that tonight’s agreement will be followed in the next few days by a final agreement on the new rules on deposit guarantee schemes and, last but not least, a Council general approach on the proposed Single Resolution Mechanism on which we made substantial progress last night."
Press release, 12.12.13
Single resolution mechanism / Bank Recovery and Resolution Directive and Deposit guarantee schemes package
"We have never before had to deal at the same time with three regulatory texts [BRRD, DGS and SRM] as complex and interrelated as these, which we are pushing to finalise at the same time. This has led to complex negotiations under considerable time pressure and considerable challenges. We have a mandate for making headway in the key trilogues on the resolution and deposit guarantee directives. I hope that with this mandate, and the important work of the rapporteurs, we can reach definitive compromises in the coming days."
On the single resolution mechanism (SRM)
"We have made real progress. We have the basis for agreement, subject to some amendments and serious legal work. It is normal that we need an additional ECOFIN Council to reach agreement. I am confident that we can make it next week. Much of the work on the side of Ministers has been completed but we are not yet at the end of the road. And let’s not forget the European Parliament: Its work must be respected and taken into account. In particular, there have been several elements where there has been substantial progress, where a consensus has been reached:
On the Volcker rule
"I would like to congratulate the US regulators and Secretary Jack Lew for the decisive step taken today in implementing the Volcker law, i.e. structural reform of banks. This is the conclusion of a long process that has lasted several years in the United States. We had expressed concerns. We will look in detail at what has been announced today. Overall, I share the concerns expressed and which Volcker wants to address with regard to banks which are ‘too big to fail, too complex to resolve, too big to save’ - we also have such banks in Europe. I confirm that we will present in the coming weeks - at the beginning of January - a proposal on the structure of banks.
No-one should be surprised by the timing. I have deliberately chosen to do this reform after and taking into account any rules that I have proposed in the banking sector (DGS, BRRD, supervision, CRD IV, etc.]. All these texts have required considerable work and they were the priority as they concern all European banks. Are all these rules sufficient? No. For certain banks that I have described, there is a need to go further with separation, calibration, treatment of the risks they take."
Press release, 11.12.13