Does the SRM mean the end of an era?

Monetary Union: Single Resolution MechanismMonetary Union: Single Resolution Mechanism

The European Parliament is holding its last plenary meeting before next European elections on May 25th. This week’ s agenda mainly includes the approval of the Banking Union leftovers.

Members of Parliament will vote on Thursday the three rules that are still pending in order to finalize the project: the Single Resolution Mechanism for ailing banks as well as the €55 bn fund to finance bankrupcies and restructurings; the directive that will force shareholders and creditors- including senior bondholders and big deposits- instead of taxpayers to cope with losses in future crisis, and also the law to reinforce national systems of deposits guarantees.

Amidst claims that the Euro zone’s banking sector is now safer and better supervised before the crisis, some international lawmakers point out to concerns and doubts:

“The level of debt of our economy –private and public- is still on the increase and that means we haven’t solved the problem of the debt bubble in the economy,” German lawmaker Sven Giegold said.

“Banks remain weakly capitalized in comparison to their economic actors and that means that that we have to be careful no to make promises which afterwards cannot hold.”

The European Parliament held 72 plenary sessions as well as approved 800 legal texts during its seventh term between 2009-2014.

 

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