Commission Communication for an EU Framework for Cross-Border Crisis Management in the Banking Sector

• Commission Communication for an EU Framework for Cross-Border Crisis Management in the Banking Sector
  18.02.2010  |  pdf, 142 Kt

Summary

On 20 October 2009, the Commission presented a Communication to the European Parliament, the Council, the European Economic and Social Committee, the European Court of Justice and the European Central Bank for an EU Framework for Cross-Border Crisis Management in the Banking Sector - COM(2009) 561 final. The Commission Communication outlines a regulatory framework, which includes early intervention tools for supervisors and resolution tools in the Member States. The Communication also addresses the question of reorganisation and winding up. The Commission has requested the Member States for general views and detailed opinions on the Communication by 20 January 2010.

Finland has replied to the consultation. The reply was prepared at the Ministry of Finance in collaboration with other competent Finnish authorities. Representatives of the financial market parties were also consulted. The views presented below are preliminary expert views.

Finland considers that developing crisis management within the EU is important and necessary. The regulatory framework outlined in the Commission Communication is a significant addition to the European System of Financial Supervisors proposed by the Commission in September 2009.

It is also necessary, in this context, to evaluate the need to develop and harmonise the tools of the authorities for early intervention in the operations of banks in distress. Effective and early intervention is necessary in order to prevent financial crises as well as to decrease the costs of a possible crisis. Certain concrete proposals are presented in the reply to develop the selection of tools for early intervention specified in the Directive relating to the taking up and pursuit of the business of credit institutions.

Finland deems it important that attention also be paid to developing cooperation between the authorities of the home and host Member States, as well as to the ex-ante safeguarding of the interests of the depositors and other customers in the State where a branch of the bank is located. Development proposals are presented in this context too.

Common objectives are needed in the EU for creating a European regulatory framework for a bank resolution. It is imperative that the authorities have available an adequate selection of common resolution tools. It is necessary to set explicit limits for the use of crisis management tools arising from other financial and legal principles. Especially the interests of taxpayers and consumers must be safeguarded.

Efficient and timely preparation and coordination of political decisions on financial stability arrangements at the EU level must be developed by means of a framework in accordance with the ECOFIN conclusions.

Finland takes a critical approach to the notion of an EU-level resolution fund, and similarly Finland considers that the nature of deposit-guarantee schemes is not easily reconciled with the use of their assets for reviving banks in distress.

Instead of centralised insolvency proceedings of banking groups, Finland's view is that a better solution in the near future would be to develop the insolvency proceedings of the Member States so that they become more harmonised.

Language versions

• Komission tiedonanto EU:n kehyksestä rajatylittävälle kriisinhallinnalle pankkialalla -Suomen vastaukset tiedonantoa koskevaan avoimeen konsultaatioon
  18.02.2010
• Kommissionens meddelande om EU:s ram för gränsöverskridande krishantering inom banksektorn - Finlands svar till den öppna konsultationen i fråga om meddelandet
  18.02.2010

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