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European Commission

MEMO

Brussels, 11 December 2013

Commissioner Michel Barnier remarks following the ECOFIN Council meeting

On Single resolution mechanism / Bank Recovery and Resolution Directive and Deposit guarantee schemes package:

“We have never before had to deal at the same time with three regulatory texts [BRRD, DGS and SRM] as complex and interrelated as these, which we are pushing to finalise at the same time. This has led to complex negotiations under considerable time pressure and considerable challenges.”

“We have a mandate for making headway in the key trilogues on the resolution and deposit guarantee directives. I hope that with this mandate, and the important work of the rapporteurs, we can reach definitive compromises in the coming days.”

On the single resolution mechanism (SRM):

“We have made real progress.”

“We have the basis for agreement, subject to some amendments and serious legal work."

“We need to stay calm. It is normal that we need an additional ECOFIN Council to reach agreement. I am confident that we can make it next week.”

“Much of the work on the side of Ministers has been completed but we are not yet at the end of the road. And let’s not forget the European Parliament: Its work must be respected and taken into account.”

“In particular, there have been several elements where there has been substantial progress, where a consensus has been reached:

  • on the question of the legal basis (support for 114 basis confirmed), combined with an intergovernmental treaty which would allow for progressive mutualisation;

  • progressive mutualisation with the end of this mutualisation in 10 years and a true single Fund and the disappearance of national compartments;

  • scope where we confirmed that all banks are covered and dealt with in the framework of the SRM with differentiation possible in certain cases.

On the Volcker rule:

“I would like to congratulate the US regulators and Secretary Jack Lew for the decisive step taken today in implementing the Volcker law, i.e. structural reform of banks. This is the conclusion of a long process that has lasted several years in the United States.”

“We had expressed concerns. We will look in detail at what has been announced today.”

“Overall, I share the concerns expressed and which Volcker wants to address with regard to banks which are ‘too big to fail, too complex to resolve, too big to save’.”

“We also have such banks in Europe.”

“I confirm that we will present in the coming weeks - at the beginning of January - a proposal on the structure of banks.”

“No-one should be surprised by the timing. I have deliberately chosen to do this reform after and taking into account any rules that I have proposed in the banking sector (DGS, BRRD, supervision, CRD 4, etc.]. All these texts have required considerable work and they were the priority as they concern all European banks.”

“Are all these rules sufficient? No. For certain banks that I have described, there is a need to go further with separation, calibration, treatment of the risks they take.”


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