2967th ECONOMIC and FINANCIAL AFFAIRS
Luxembourg, 20 October 2009
The Council adopted the following conclusions:
"1. The current crisis in global financial markets has severely tested the stability of the European financial system and revealed that more fundamental changes to the financial stability arrangements, supervisory and regulatory framework are needed to ensure enhanced coordination among national supervisors, central banks and governments in a crisis situation, as well as an integrated approach to crisis prevention, management and resolution in order to promote financial stability.
2. Against this background, the Council RECALLS the conclusions adopted by the 9 June
2009 ECOFIN Council1 and the 18-19 June 2009 European Council2, which underscored the need "to advance work on building a comprehensive cross-border framework for the prevention and management of financial crisis". The Council STRESSES the need to move forward to ensure that progress is made in parallel to the ongoing work on the EU supervisory framework
3. In particular, the Council WELCOMES the Report of the EFC High Level Working Group
on Cross-Border Financial Stability Arrangements (HLWG) of 8 July 20093, and on that basis
AGREES on the need to make progress on the following two strands, which are closely interrelated and complementary: strengthen the existing regulatory framework for crisis prevention, management and resolution and develop a comprehensive EU-wide framework for closer policy coordination on financial stability, in particular in a financial crisis, taking into account the respective responsibilities of EU bodies/institutions/committees participating in this process as well as the international dimension.
4. The Council UNDERSCORES the importance of:
• significantly enhancing the EU regulatory framework for crisis prevention, management
and resolution by developing common and interoperable tools to improve Member States'
ability to adequately handle a financial crisis. To this end, and recalling its 9 June conclusions, the Council IS LOOKING FORWARD to consider the Commission Communication on bank resolution (including early intervention tools) to be adopted [today], and INVITES the EFC to carry on preparatory work in view of the discussion at its December meeting. The Council IS LOOKING FORWARD to the Commission’s proposals in respect of deposit guarantee schemes in early 2010, which should also include consideration for alternative ways to organise deposit guarantee schemes in the EU, including pan-EU deposit guarantee schemes. The Council INVITES the
Commission to further review the home-host arrangements for branches under the EU single passport.
• developing a comprehensive EU-wide framework for closer policy coordination on financial stability, in particular to deal with a cross-border financial crisis, while taking into account the respective responsibilities of EU bodies/Institutions/Committees and national authorities participating in the process and building on the following elements:
– stronger prevention policies and the efficient and timely assessment and prioritisation of risks, including with EU-wide stress tests on a regular basis in addition to the tests carried out by national authorities;
– the full implementation of the 2008 MoU, taking into account the lessons from the current crisis and the new EU supervisory system;
– strengthened mechanisms for policy coordination in crisis management among Member State governments in line with the Treaty obligations;
– the need to develop credible alternative to public support, notably through facilitating winding-down of cross-border financial groups, including through the development of firm-specific contingency planning and resolution plans.
5. The Council therefore INVITES the EFC together with the Commission to work further
towards developing a policy coordination framework for crisis prevention, management and
resolution, taking into account ongoing work at the Financial Stability Board and the Commission
proposals on the regulatory framework, by:
• developing practical arrangements to further enhance the EU-wide policy coordination in cross-border crisis prevention, management and, resolution between Member State governments within the Council/EFC, taking into account as appropriate, the links to the ESRB and ESFS, and building on the practical arrangements set up during the crisis;
• carrying out further work on burden sharing to explore the pros and cons of ex-ante and ex-post burden sharing arrangements as well as possible principles, criteria and procedures that could be applied in a crisis in the case government support becomes necessary.
To this end, the Council INVITES the EFC to produce a reflection paper for the December Ecofin.
6. The Council ENDORSES the attached ECOFIN roadmap, which sets out the short, medium
and long term priorities in strengthening EU financial supervision, stability and regulation."