Since its creation in 2014, the Banking Union has made significant progress on an EU single rulebook, concerning the establishment of a new European architecture for supervision and resolution, and on reducing risks.
In its recent statement, the Banking Union has agreed to:
- immediately strengthen the common framework for bank crisis management and national deposit guarantee schemes (CDMI framework);
- create a more robust common protection for depositors;
- facilitate a more integrated single market for banking services; and
- encourage greater diversification of banks’ sovereign bond holdings in the EU.
The CDMI framework shall feature:
- a harmonised public interest assessment;
- broadened application of resolution tools in crisis management at European and national level, including for smaller and medium-sized banks, where the funding needed for effective use of resolution tools is available;
- further harmonisation of the use of national deposit guarantee funds in crisis management, while ensuring appropriate flexibility for facilitating market exit of failing banks in a manner that preserves the value of the bank’s assets; and
- harmonisation of targeted features of national bank insolvency laws.
The Eurogroup invited the European Commission, to consider bringing forward legislative proposals for a reformed CMDI framework and further invited legislators to complete any legislative work during this institutional cycle until early-2024.