#52026AG0003(02)Council's Position on Amending Early Intervention Measures and Resolution Funding in EU Banks
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This regulation updates how small and medium-sized banks in the EU can access funds during financial difficulties. It allows for using deposit guarantee schemes under strict conditions to help these banks avoid taxpayer-funded bailouts. The new rules aim to protect depositors and maintain financial stability while ensuring that shareholders and creditors bear losses first.
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Key Changes
- Allows use of deposit guarantee funds under strict conditions for bank resolution
- Enhances cross-border coordination among resolution authorities
- Specifies funding hierarchy to avoid taxpayer bailouts
Obligations
What this law requires
Small and medium-sized banks must implement strict internal loss-absorbing capacity measures to ensure adequate funding accessibility in case of financial difficulties.
Resolution authorities are authorized to draw on funds from deposit guarantee schemes only under strict conditions to finance bank resolution actions.
Shareholders and creditors must bear losses before accessing funds from the Single Resolution Fund during the resolution process.
Banks must ensure their resolution strategies include a transfer resolution strategy as part of their compliance with the new funding hierarchy outlined in the regulation.
Cross-border cooperation between supervisory and resolution authorities must be strengthened to reduce fragmentation across the Union.