Commission seeks sweeping new powers over failed banks

The European Commission adopted a proposed Regulation on the 10 July 2013 to establish a Single Resolution Mechanism (SRM) for the Banking Union.

The Single Resolution Mechanism would complement the Single Supervisory Mechanism which was proposed by the European Commission in September 2012. It is set to centralise key competences and resources for managing the failure of any bank in the Euro Area and in other Member States participating in the Banking Union.

The SRM is seen asthe second pillar of a 'banking union' meant to galvanise the euro zone's response to the financial crisis.

The announcement by the European Commission was said to have received a cool response from the German government. German Finance Minister Wolfgang Schäuble said that only national authorities have the power to wind down banks. Anything beyond that would require a change to European Union treaties.

ESO: Background Information: Finance ministers strike deal to stem bank bailouts http://www.europeansources.info/record/finance-ministers-strike-deal-to-stem-bank-bailouts/

EurActiv, 11.07.13: New banking authority pits Commission against Berlin http://www.euractiv.com/euro-finance/new-banking-resolution-authority-news-529225

European Commission: RAPID: Press Release, IP/13/674: Commission proposes Single Resolution Mechanism for the Banking Union http://europa.eu/rapid/press-release_IP-13-674_en.pdf

ESO: Background information: Eurozone bailout fund to prop up banks from 2014 http://www.europeansources.info/record/eurozone-bailout-fund-to-prop-up-banks-from-2014/

European Commission: The EU Single Market: Financial Services: Banking union http://ec.europa.eu/internal_market/finances/banking-union/index_en.htm

BBC News, 10.07.13: EU unveils plans to wind down failed banks http://www.bbc.co.uk/news/business-23253365

EUObserver, 10.07.13: Brussels on collision course with Germany on banking union http://euobserver.com/economic/120822

Deutsche Welle, 10.07.13: Germany opposes EU banking closure authority http://www.dw.de/germany-opposes-eu-banking-closure-authority/a-16944074

Spiegel Online International, 10.07.13: Union Disunion: ECB to Begin Inspection of Euro-Zone Banks http://www.spiegel.de/international/europe/ecb-to-begin-inspecting-bank-balance-sheets-a-910578.html

European Commission: RAPID: MEMO/13/685: European Commission's reaction on the comparison of the Single Resolution Mechanism for banks with the Nazi regime http://europa.eu/rapid/press-release_MEMO-13-685_en.pdf

Open Europe: Flash Analysis, 10.07.13: New Open Europe flash analysis: Controversial second pillar of banking union looks insufficient to hold up eurozone roof in a crisis http://www.openeurope.org.uk/Article/Page/en/LIVE?id=12617&page=FlashAnalysis

EUObserver, 15.07.13: Who pays the bills in a banking union? http://euobserver.com/economic/120835

Blog: LSE EuroppBlog, 07.08.13: The fragility of banks in the Eurozone’s periphery means that proposals for a European wide bank resolution fund are likely doomed to fail http://bit.ly/16mdb1y

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