The European Association of Co-operative Banks closely follows the Commission’s work for the forthcoming review of the crisis management and deposit insurance framework.
While EACB members see room for improvement in the current legislation (aiming at i.a. more legal certainty, maximised deposit protection, more transparency, proportionality), the review should be weighed and analysed carefully having regard to the diversity of the national legal systems where the EACB members operate.
In this respect, our key messages are:
1. The determination of the scope of resolution framework only in order to differentiate between banks on the basis of their size may simplify the matter but is not fit for purpose. Also the business model, funding structure and risk profile are relevant criteria.
2. The future framework should not change for banks without systemic impact, in particular in respect of banks members of an IPS.
3. All banks, and especially small and mid-size ones without a systemic impact (with a retail-oriented business model and a relatively low risk profile), should not be subject to disproportionate resolution preparation and resolution requirements, as enshrined in Article 1 para. 1 BRRD which requires both resolution and competent authorities to take proportionality into account. In general, the principle of proportionality should be emphasized and converged across the European Union.
4. The requirements for resolution planning and the removal of the obstacles to resolvability should be clearly limited to the preferred resolution strategy determined by the resolution authority.