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Barnier dodges resolution delay rumours

Thursday 8 September 2011 - by Andrew Hickley

Vilnius, capital of Lithuania

European commissioner Michel Barnier has refused to confirm whether proposed requirements for bank recovery and resolution could be further delayed by a month or more.

Outlining EU reform efforts on a trip to Lithuania on Thursday, Barnier could only say that the plans, first anticipated in the early summer, would be published "soon".

On Wednesday Bloomberg reported that the unveiling of the suggested measures, including bail-ins for senior bondholders of failing banks, are not expected to be finalised until October at the earliest.

Unnamed sources informed the news agency that Barnier is wary that of introducing any new banking measures which could spook investors at a time of market turbulence.

In his speech in the capital Vilnius to the Lithuanian Banking Association, the commissioner could only say that bank recovery and resolution requirements are on their way.


"We will... propose soon a new framework on bank recovery and resolution. By setting up common tools, our goal is to prevent potential crises from having systemic effects," Barnier said.

"[We] want to avoid a situation where the cost of a potential new bank crisis is borne once again by taxpayers. I believe that these proposals on responsibility will increase confidence in the financial sector."

A consultation in January suggested that the commission would look to announce proposals before summer 2011.

"Step by step, we are taking important measures which will make the financial world safer," the Frenchman continued.

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Email: andrew.hickley@gfsnews.com


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