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Its aim is to achieve an agreement acceptable to all Member States, consistent with the objective of building a strong banking union, and within the deadline set by the European Council.
The presidency instructed the Council's working group to continue work so as to enable it to prepare a final compromise proposal for the Council's meeting on 10 December. The presidency identified issues for consideration by the working group in the following terms:
The proposed SRM will form one of the key elements of Europe's planned Banking Union. Creation of a Banking Union is essential to overcoming market fragmentation and breaking the link between vulnerable sovereigns and banks.
The Parliament and the Council are currently negotiating a directive on bank recovery and resolution, which is aimed at harmonising EU rules for the orderly resolution of banks. While the Directive would rely on a network of national authorities and resolution funds, the creation of an SRM would ensure that supervision and resolution are exercised at the same level for countries that share the supervision of banks within the SSM1.
The SRM would cover all countries participating in the SSM, namely the euro area Member States and those non-eurozone countries that decide to join via close cooperation agreements. It would enter into force on 1 January, 2015.
The Commission's proposal is based on article 114 of the Treaty on the Functioning of the European Union, which would require a qualified majority for adoption by the Council, in agreement with the European Parliament.
Video: Council discussion on the SRM
Statement by chair of ECOFIN Rimantas Šadžius on the outcome of discussions on the Single Resolution Mechanism
The Presidency aim is an agreement acceptable to all, consistent with an objective to build a strong Banking Union, and within the deadline set by the European Council.
The point of the departure must be that the scope of the SRM covers all banks authorised in participating Member States. The working group must, however, examine options for enhancing the role of national resolution authorities, bearing in mind the role that national supervisory authorities have in the supervision of less significant banks in the SSM.
I noted a large degree of support for the governance structure as set out in the Presidency compromise, but I also noted that there is as yet agreement to be found. I would therefore like the working party to continue its work and also explore the voting modalities and the possibilities of involvement of the Council, to see if this is a possible route. There is agreement, however, among us all, that any mechanism should enable swift, robust and effective decision making.
On the structure of the Fund I notice that we are still in the process in looking for best solution. I think we have to work on the basic premise that we will have one Single Fund.
Beyond that I think we still need to explore possibilities as regards the structure and the build-up of the fund. I think it is worthwhile at least to look at how the Fund can be constructed, in a transitional period. Some ideas deserve further exploration.
As regards issues of non-contractual liability and equality of treatment of participating and non-participating Member States, we should look for ways to solve these issues in a reasonable and fair manner.
Commissioner Barnier's speech (French)
On 18 November, ECON held a meeting on the proposal for a Single Resolution Mechanism (SRM), aiming to establish a common framework for the resolution of banks covered by the Single Supervisory Mechanism (SSM). This meeting provided an opportunity for the Members to discuss the 1051 amendments that were tabled to the Commission proposal. An important issue was the scope of the proposed SRM. Other issues were the division of tasks between the Board, the Commission and national resolution authorities, the composition of the Board, the Fund and the possibility of having a backstop for the Fund.