Bank crisis fund now full, regulator says

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The EU’s controversial banking crisis fund has reached its intended capacity of 78 billion euros, meaning lenders will no longer have to pay any more annual contributions, a senior official said today (13 February). Announced.

The Single Resolution Fund, designed to avoid a 2008-style taxpayer bailout of the financial system, requires euro area banks to pool together each year until it reaches a level equivalent to 1% of bank deposits. We have accumulated over 10 billion euros.

Dominique Labouret, chairman of the Single Resolution Board (SRB), which manages the reserve, said at a meeting in Brussels that the fund had “reached its target level”. “The SRB does not plan to issue a contribution request for this year.”

The treaty, which aims to shore up private sector finance with an additional 68 billion euros in public funds, has not yet been ratified by Italy, which Laboure told reporters was “unfortunate”. .

But even those funds may prove to be too small.

“We can handle the vast majority of cases,” Laboure said. But megabanks such as Deutsche Bank and Santander have said they would “demand a little more than the 145 billion euros available” in the event of a crisis, as their failure could bring the global financial system to its knees. “There may be a need,” he said.

Last year, the Swiss central bank had to provide Credit Suisse, which was in crisis, with a loan facility worth around 100 billion Swiss francs (106 billion euros), and even Spain’s mid-tier lender Banco Popular At the time the central bank bailed it out, it had debts of around 150 billion euros. 2017 SRB.

Having to shell out money for EU funds is understandably unpopular with banks in the EU, many of which are looking to challenge their requests for funds in court.

But Rabelais said he was “very satisfied” with the EU court’s December decision canceling the 2021 bill sent to Crédit Agricole and Société Générale, saying the decision was about form, not content. It pointed out.

“The court directed us to rephrase and better justify the same amount,” he said, noting there was no overall risk to the fund from the judicial decision. “This is not what the bankers wanted…there are no kickbacks for them.”