The ailing bank Credit Suisse was taken over by competitor UBS.
(Photo: dpa)
Brussels, London In the future, European banks should be liquidated more easily in the event of difficulties. In order to prevent national governments from using taxpayers’ money to save their financial institutions, the EU bank resolution authority is to be given more power. This emerges from a reform draft by the EU Commission, which is available to the Handelsblatt. He is due to be presented next week.
The legislative package had been in the works for the past year, but the bankruptcy of the American Silicon Valley Bank (SVB) and the emergency takeover of the major Swiss bank Credit Suisse by competitor UBS have recently increased the pressure to act.
In the draft, the Commission criticizes that banks in crisis have so far been liquidated too rarely. In the case of small and medium-sized institutions, taxpayers’ money is often used instead of industry-financed safety nets. “This is against the intent of the framework that was drafted after the financial crisis,” the draft says.
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