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.

• Primary Source

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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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