The European Commission Issues Communication on the Funding of Bank Resolution Scheme
The European Commission has issued a communication titled Bank Resolution Funds (communication), which deals with funding for a European bank resolution scheme. The communication supports the establishment of ex ante resolution funds, funded by a levy on banks, to facilitate the resolution of failing banks in ways which avoid contagion, which allow the bank to be wound down in an orderly manner and in a timeframe which avoids the "fire sale" of assets. The Commission believes that resolution funds are a necessary part of the toolbox of several different measures that will be included in the new EU crisis management framework seeking to mitigate the burden on taxpayers and minimize – or better still eliminate - future reliance on taxpayer funds to bail out banks.