Bank Resolution Funds

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EESC opinion: Bank Resolution Funds

Key points:

The EESC is concerned by the use of taxpayers' money to cover bank losses and supports in principle the establishment of a harmonised network of national ex-ante bank resolution funds (BRF) linked to a set of coordinated national crisis management arrangements.

The EESC is concerned that in order to establish a workable bank resolution funds scheme, Member States should agree beforehand on the adoption of common methods and uniform rules in order to avoid distortions of competition.

The EESC believes that before any steps are taken to introduce bank levies, the Commission should conduct a thorough assessment of the cumulative effects of levies and BRFs. Making a decision on introducing BRF requires an estimation of how much the entire scheme would cost, to what extent it would impact the lending potential of the banking sector, and how long it will take before the BRF is made strong enough or it reaches its target size. The EESC recommends tailoring these estimates to a worst case scenario.