European Commission adopts proposal to boost bank crisis management

BRUSSELS, April 18 (KUNA) -- The European Commission Tuesday adopted a proposal to adjust and further strengthen the EU's existing bank crisis management and deposit insurance framework, with a focus on medium-sized and smaller banks.

Today's proposal will enable authorities to organise the orderly market exit for a failing bank of any size and business model, with a broad range of tools, it said in a press release.
The EU's banking sector, which includes a strong crisis management framework, has become much more resilient in recent years. Financial institutions in the EU are well capitalised, highly liquid and closely supervised, it said.
However, experience has shown that many failing medium-sized and smaller banks have been managed with solutions outside the resolution framework.
This sometimes involved using taxpayers' money instead of the bank's required internal resources or private, industry-funded safety nets such as deposit guarantee schemes and resolution funds, it noted. (end) nk.ibi.