European failing bank plan to be published
The EU is set to publish proposals for failing banks across the European landscape.
The planned EU-wide resolution mechanism will have the power to wind-up these failing banks and has been planned by the European Commission for some time.
EU’s financial services chief, Michael Barnier, will announce the proposal in Brussels today – despite negative responses from the German front.
Last month, EU leaders confirmed their support of the EU-wide single bank resolution mechanism (SRM) but German Finance Minister Wolfgang Schaeble expressed some concern yesterday over the initiative.
“I would strongly ask the commission in its proposal for an SRM to be very careful, and to stick to the limited interpretation of the given treaty,” he said.
“We have to stick to the given legal basis, as otherwise we risk major turbulence.”
The ECB backs the commission in its efforts to create a more centralised banking system that should strengthen EU banks and reduce dependency between lenders and sovereign states.
The Brussels proposal must be approved by the European Parliament and all governments concerned before it can take effect.