EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU. The public consultation addresses three EU legislative texts: Bank Recovery and Resolution Directive (BRRD), Single Resolution Mechanism Regulation (SRMR), and Deposit Guarantee Schemes Directive (DGSD). The possible revision of the resolution framework as well as a possible further harmonization of insolvency law are foreseen in the respective review clauses of the three legislative texts. By reviewing the framework, EC aims to increase its efficiency, proportionality, and overall coherence to manage bank crises in EU as well as to enhance the level of depositor protection, including through the creation of a common depositor protection mechanism in the banking union. The consultation is open until May 20, 2021.
This consultation covers 10 questions on the key directions of the review of the bank crisis management and deposit insurance frameworks. The questions raised in the consultation relate to the following aspects:
- Objectives of crisis management and deposit insurance frameworks
- Use of the tools and powers in BRRD
- Revision to the conditions to access different sources of funding in resolution and in insolvency
- Potential reform of the use of Deposit Guarantee Scheme funds in the future framework
- Issues related to depositor protection that would require clarification of the current rules and/or policy response
- Scope of depositor protection in the future framework
- European Deposit Insurance Scheme
Crisis management and deposit insurance, including a common funding scheme for the Banking Union, are strongly interlinked and interdependent and hold the potential for synergies, if developed jointly. In parallel to this consultation, EC is holding a targeted consultation, until April 20, 2021, which covers 41 questions that include the general questions and those addressing concrete technical features.
Comment Due Date: May 20, 2021
Keywords: Europe, EU, Banking, BRRD, SRMR, DGSD, Deposit Insurance, Resolution Framework, Banking Union, Proportionality, Crisis Management Framework, EC
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