Review of the bank crisis management and deposit insurance framework

Background

At the request of the Spanish government and following the most recent legislative package to adjust and strengthen the EU bank crisis management and deposit insurance (CMDI) framework, the EESC delivers its views and recommendations to the co-legislators and the Spanish Presidency of the Council. The proposals aim at tackling remaining risks in the European banking sector, advance further in the completion of the banking union, and strengthen the EU single market in the interest of depositors and taxpayers. Overall, the EESC supports the Commission's proposals to improve crisis management and deposit protection, highlighting the need for speed, flexibility, transparency, and proportionality in addressing banking crises. The Committee emphasizes the significance of completing the Banking Union to ensure financial stability and sound crisis management.

Key points

In the opinion, the EESC:

•    appreciates the Commission's comprehensive proposal for a new and more solid regulation of banking crises and to strengthen deposit insurance. However, the complete consolidation of the European financial system can only be achieved with the completion of the Banking Union, that would reduce market fragmentation;

•    highlights the need for speed, flexibility and pragmatism in responding to banking crises. Recent events have shown the importance of containing risks of contagion, as well as the loss of confidence among investors and depositors. Furthermore, the transfer of a troubled bank to another bank should happen in next to no time. A tailored approach should be implemented for each crisis, in terms of the regulatory approach, selection of tools, implications of the response, cooperation between stakeholders, execution speed, and the nature of the financial resources used; 

•    encourages the co-legislators to find solutions regarding the Public Interest Assessment that reduce legal uncertainty as much as possible. An appropriate balance must be held between its enhanced formulation and the proportionality of its application to small, medium-sized and local banks, to avoid the potential negative impact on their interests in general, and capital requirements in particular;

FULL OPINION

Additional information 

- EESC section: Economic and Monetary Union and Economic and Social Cohesion (ECO)
- opinion type: Mandatory
- rapporteur: Giuseppe Guerini (Civil Society Organisations-Group III / Italy), Christophe Lefèvre (Workers-Group II / France)
- reference: ECO/608-EESC-2022-2022-06298
- referral: COM(2023) 225 final COM(2023) 226 final 2023/0111 CODCOM(2023) 227 final 2023/0112 CODCOM(2023) 229 final 2023/0113 COD
- date of adoption by section: 27/06/2023
- date of adoption in plenary: 12-13/07/2023

Contact