Sélecteur de langues
Brussels, 12 March 2001
Financial services: Commission welcomes Council adoption of Directive on winding up of credit institutions
The European Commission has welcomed the adoption by the 12 March Council of Economics and Finance Ministers of the proposed Directive on the Reorganisation and Compulsory Winding Up of Credit Institutions. Under the proposed Directive, where a credit institution with branches in other Member States fails, the winding up process will be subject to a single bankruptcy proceeding initiated in the Member State where the credit institution has its registered office (known as the home state) and governed by a single bankruptcy law, that of the home state. This approach is consistent with the home country control principle that is the basis for the EU's banking Directives. The Directive will fill a major gap in the European Union's financial services legislation. It was identified as a top priority in the Financial Services Action Plan (see IP/00/556) and the importance of its implementation was reiterated at the Lisbon Summit.
Internal Market Commissioner Frits Bolkestein, said: "Investors must feel confident that they are adequately protected if the full potential for cross-border trade in financial services is to be realised. This Directive ensures that in the case of the failure or reorganisation of a credit institution, there is a clearly established procedure, equally valid for all creditors, for the division of assets."
Currently, if a bank or credit institution with branches across Europe has to be wound up and its assets divided among its creditors, the authorities in each Member State where the institution is represented can open separate insolvency proceedings. This can lead to conflicts of jurisdiction and means that creditors are not equally treated. Similarly, if an institution has to be reorganised to restore it to financial health, approaches in different Member States can be divergent. While winding up and reorganisation proceedings are, hopefully, rare, the Directive is designed to guarantee consumer protection in such instances. This is particularly important given the explosion in financial services and the growth in personal investment and savings plans.
The Directive was first proposed in 1985, but adoption was held up for several years due to disagreements between the UK and Spain over Gibraltar. But following resolution of these problems thanks to arrangements agreed between the UK and Spain on designating competent authorities, Council reached political agreement in May 2000 (see IP/00/454). Under the EU's co-decision procedure, the Common Position was then put to the European Parliament, which voted 13 amendments at its January 2001 plenary. All these amendments have been endorsed by the Commission and the Council.