EU approaches to end “too big to fail” banks by 2024


London — European Union agencies to dismantle bankrupt banks strengthen lenders’ defenses over the next few months to prevent them from remaining “too big to go bankrupt” by January 2024 He said he would put pressure on him.

The Single Resolution Board (SRB) is the first “heat map” of progress to prevent bankrupt banks from needing taxpayer relief, and is a bank’s special debt to replenish burned-out capital. The issue shortage has been reduced to 32.6 billion euros, he said. Or 0.45% of total risk exposure.

SRB, along with Bulgaria and Croatia, is the leading solution for banks in the euro area of ​​19 countries.

While most banks have achieved their goal of issuing special debt called MREL, SRB has improved other factors that ensure that some lenders have a smooth “solution” or resolution in case of failure. Said you need to.

“All banks led by the largest banks are making good progress. At the same time, there are clear areas that need more attention in 2022 and 2023,” SRB Chair Elke Koenig said in a statement. ..

SRB is all about improving liquidity and collateral mobilization in resolution, as well as the ability of banks to restructure and segregate after a bankruptcy, and to enable critical services to continue under new owners. Banks need to make progress.

Watchdog will move to a “dry run” of more testing and resolution at late banks to fill the “capacity gap” over the next 12 months.

Last month, the Bank of England said it was pleased that Britain’s major lenders had taken steps to ensure that they were “too big to fail” in the future crisis.

“I don’t think the bankruptcy of these institutions will now require public funding. It’s an important plan for me to have a policy that’s too big to go bankrupt,” Bank of England Governor Andrew Bailey said on Monday. I told the British Parliament.

Hugh Jones