European Commission's public consultation on the technical details of a possible EU framework for bank recovery and resolution : ESCB contribution

On 6 January 2011, the European Commission released for public consultation the working document "Technical details of a possible EU framework for bank recovery and resolution", with the a view to developing a formal legislative proposal by Summer 2011.1 The consultation follows the Commission's communications on "An EU Framework for Crisis Management in the Financial Sector" of 20 October 2010 and on "Bank Resolution Funds" of 26 May 2010. The ESCB welcomes the opportunity to contribute to the defi nition of the technical details of a possible EU framework for bank recovery and resolution. Full support to the objective of developing an EU resolution framework and addressing obstacles to the effective management of crisis of EU cross-border fi nancial institutions was already expressed in February 2010.2 This contribution, nonetheless, should be considered without prejudice to the opinion that the ECB will adopt on the legislative proposals of the Commission once the ECB is formally consulted. The reply focuses on those aspects that are considered of particular relevance from a central banking perspective. In particular, the contribution is structured as follows: the overall stance on the Commission' proposals, is presented in Part 1 of the document; the input to a selected number of issues - organised following the structure of the Commission's consultation document - is developed in Part 2. The list of the selected questions addressed in the contribution is provided in an appendix.