EU leaders have agreed on a general approach to the banking package of reforms, paving the way for negotiations to start on the details, said the European Commission.
The Commission put forward a raft of regulations and amendments to existing law, comprising the so-called banking package, in November 2015. The measures, if agreed, would implement international standards into EU law, while taking into account how these apply to the European sector.
“After more than one year and a half of very complex and technical discussions, the Council [EU member state representatives] has reached a general approach on this very important risk-reducing package. Europe needs a strong and diverse banking sector to finance the economy,” Commission Vice-President Valdis Dombrovskis, responsible for Financial Stability, Financial Services and Capital Markets Union, said.
The Commission said it now invited the European Parliament to define its negotiating position on the package. Both the Council and the Parliament must agree on the package before any of its measures pass into law. The final purpose is to create a banking union.
An important component of the package are the amendments to the existing capital requirements regulation and capital requirements directive. These entered into force in 2013 and set out prudential requirements for credit institutions and investment firms as well as rules on governance and supervision.
The bank recovery and resolution directive and the single resolution mechanism regulation, which comprise rules on the recovery and resolution of failing institutions and establish the single resolution mechanism—essentially a fund—are also under review.