On 18 April 2023, the European Commission has adopted its proposal to strengthen the EU's existing bank crisis management and deposit insurance (CMDI) framework. 

It aims at enabling National Competent Authorities and Resolution Authorities to organise the orderly market exit for a failing bank of any size and business model. Most notably, it would facilitate the use of industry-funded safety nets to shield depositors during banking crises. These safety nets, i.e. the Single Resolution Fund and national Deposit Guarantee Funds, are intended to be complementary to the banks' internal loss absorption capacity, which in the European Commission's proposal remains the first line of defence.

The proposal comes in the context of an incomplete Banking Union and focuses particularly on medium-sized and smaller banks. The current framework was originally presented in 2014 and has not fully delivered on its objectives. Most notably, avoiding the use of taxpayers money to save smaller failing banks. However, with a number of politically salient provisions, the proposal is expected to face a rocky negotiation process.

The ABBL welcomes the attention of the European legislator towards this important topic and stands ready to represent the voice of its members in the forthcoming legislative process. The European Parliament and the Council of the European Union will now work on their respective positions on the various components of the European Commission's proposal. The European Parliament faces a particularly though deadline, as the general elections will take place in 2024. 




Head of Banking and Financial Regulation



European Affairs Advisers