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"Crises experienced by financial institutions need to be tackled at an early stage to curb the threat of contagion in the financial system", Mr Kemmer, General Manager of the Association of German Banks, added. Germany was already well- equipped in this respect with its Restructuring Act, although national legislation alone was no longer enough in the face of the internationalisation of financial market activities. "A crisis does not come to a halt at national borders."
Whether all the crisis management tools proposed in the draft directive were appropriate was something that still needed to be examined closely. In principle, the Commission's approach was right, however. For example, the use of taxpayers' money in resolution measures was to be avoided by the banking sector setting up financing arrangements at national level - following the example of Germany with the Restructuring Fund concept that it had already implemented.
The additionally proposed joint liability of national financing arrangements, i.e. a European system of financing arrangements, was wrong, on the other hand. "There is no justification for passing on the costs of restructuring an institution - which may, for example, be due to the failure of national supervisors - to institutions in other Member States", Mr Kemmer said. Harmonisation of EU supervisory law and supervisory practice had not yet made sufficient progress to allow this.