BRUSSELS -- The European Commission said on Thursday it has requested 11 member states to fully implement the Bank Recovery and Resolution Directive (BRRD), which was put in place to create a safer and sounder financial sector for the European Union (EU) in the wake of the financial crisis.
The 11 countries are Bulgaria, the Czech Republic, France, Italy, Lithuania, Luxembourg, the Netherlands, Malta, Poland, Romania and Sweden.
The new BRRD rules, as a centerpiece of the EU's Banking Union, equip national authorities with the necessary tools and powers to mitigate and manage the distress or failure of banks or large investment firms in all EU member states.
The objective is to ensure that banks on the verge of insolvency can be restructured without taxpayers having to pay for failing banks to safeguard financial stability. Instead, they provide for shareholders and creditors of the banks to pay their share of the costs through a "bail-in" mechanism.
The deadline for the transposition of these rules into national law was Dec. 31, 2014. However,the above 11 EU countries have failed to implement these rules into their national law.
If these countries fail to comply within two months, the Commission may decide to refer them to the EU Court of Justice. Enditem
