European Parliament published a brief report that analyzes the key differences between the U.S. and the Banking Union resolution and liquidation framework, including differences in terms of funding arrangements. In view of recent liquidation and resolution experiences, the report assesses what an EU insolvency regime would bring to the Banking Union both in terms of small and medium-size banks’ resolution and in terms of strengthening the existing Bank Recovery and Resolution Directive (BRRD) resolution framework. The briefing finally outlines the key building blocks of an EU liquidation regime for the Banking Union.
As part of its July 2018 assessment of the Euro area, IMF recommended to entrust SRB with administrative liquidation powers, along the lines of the U.S. FDIC. Based on the FDIC experience, this would mean entrusting SRB with insolvency tools akin to resolution to deal with failing banks that do not meet the public interest test. At the December ECON hearing, the SRB Chair portrayed the FDIC model as a way to wind up small and medium-size institutions while protecting insured depositors. At the December 06 ECON hearing, the SRB Chair advocated a framework that links depositor protection (that is, Deposit Guarantee Scheme) and gives the chance to unwind small- and medium-size banks under national insolvency proceedings, referring to the FDIC. The report concludes that adopting the U.S. FDIC model in the Banking Union would imply further harmonization on three fronts:
- An EU bank insolvency framework
- Further supervisory functions for SRB
- European Deposit Insurance Scheme underpinned by further harmonization of the DGS Directive
Related Link: Report
Keywords: Europe, EU, US, Banking, SRB, Resolution Framework, BRRD, FDIC, European Parliament
Previous ArticleFSB Chair Randal Quarles Speaks About the Upcoming Work of FSB
APRA announced the standardization of quarterly reporting due dates for authorized deposit-taking institutions.
Bundesbank published a list of "EntryPoints" that are accepted in its reporting system; the list provides taxonomy version and name of the module against each EntryPoint.
The private sector working group of ECB on euro risk-free rates published the recommendations to address events that would trigger fallbacks in the Euro Interbank Offered Rate (EURIBOR)-related contracts, along with the €STR-based EURIBOR fallback rates (rates that could be used if a fallback is triggered).
EBA published the phase 1 of its reporting framework 3.1, with the technical package covering the new reporting requirements for investment firms (under the implementing technical standards on investment firms reporting).
Asia Pacific Australia Banking APS 111 Capital Adequacy Regulatory Capital Basel RBNZ APRA
ESMA published the final guidelines on outsourcing to cloud service providers.
EBA published annual data for two key concepts and indicators in the Deposit Guarantee Schemes (DGS) Directive—available financial means and covered deposits.
OSFI has set out the schedule for release of draft guidance on the management of technology risks by federally regulated financial institutions and private pension plans.
MAS updated rules for new housing loans by banks and finance companies.
HKMA published a statement on the 100% Personal Loan Guarantee Scheme and a guideline on the Green and Sustainable Finance Grant Scheme (GSF Grant Scheme) as announced in the 2021-22 Budget.