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Kick-off Meeting on Bank Resolution

Following the onset of the financial crisis in 2007, many member states had to use public funds to save failing banks. With the Bank Recovery and Resolution Directive as well as the Single Resolution Mechanism, systems have since been put in place to ensure that shareholders and creditors rather than taxpayers mainly foot the bill when a bank enters troubled waters.

But are the responsible authorities at EU and national level adequately prepared and equipped to plan for the orderly exit of failing banks? And how do they undertake their resolution planning responsibilities in practice?

These questions are the subject of a new audit to be undertaken jointly by a group of 7 Supreme Audit Institutions. They work together in the Task Force on European Banking Union, which met in Bonn on 18 and 19 December 2018 to kick-start the audit. The Task Force is a body of the Contact Committee of Supreme Audit Institutions. The Task Force is chaired jointly by the Bundesrechnungshof and the Algemene Rekenkamer.

Task Force Bank Resolution

Equipped with a common audit plan, Supreme Audit Institutions will spend the next months with intensive field work at their respective National Resolution Authorities. The joint audit is likely to conclude in 2020. By then the Single Resolution Board in Brussels expects that National Resolution Authorities have prepared resolution plans for the approximately 2300 smaller and medium-sized banks within their jurisdiction. A realistic target? That remains to be seen.

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