Banks, EU Commission invites Italy to implement rules on loss absorption

Banks, EU Commission invites Italy to implement rules on loss absorption
Banks, EU Commission invites Italy to implement rules on loss absorption

(Teleborsa) – The European Commission has sent motivated opinions to Belgium, the Czech Republic, Italy, Lithuania, Latvia, the Netherlands, Poland, Portugal and Romania for failing to transpose EU rules on bank recovery and resolution (Directive 2019/879). This directive implements the Total Loss Absorbing Capacity (TLAC) standard for systemically important banks adopted by the Financial Stability Board (FSB) and improves the application of the minimum requirement of own funds and eligible liabilities (MREL) for all banks .

The new rules, stresses the EU executive, “better ensure that banks develop a solid and sufficient capacity to absorb losses and recapitalize so that, in the event of a bank failure, the losses are borne by shareholders and creditors banks and not financed by taxpayers’ money. ”

Member States had to transpose the Directive and communicate the national transposition measures to the Commission by 28 December 2020. The Commission sent letters of formal notice in February 2021 by asking the Member States concerned to notify the full transposition measures. Due to the failure to notify any transposition measures, the Commission has decided to continue the infringement procedures by sending them reasoned opinions. The Member States concerned now have two months to take the necessary measures, otherwise the Commission it could decide to refer cases to the Court of Justice of the European Union.

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