CEPS: Euro bank resolution scheme must be piecemeal

Author: | Published: 21 Apr 2011

A common European bank resolution scheme would have to be targeted and piecemeal or not at all, says Centre for European Policy Studies (CEPS) CEO Karel Lannoo.

“Rather than attempting to harmonise insolvency procedures Europe-wide, Europe should be looking at harmonising bits and pieces,” he said.

“An approach might be to use subordinated debt such as CoCos, for example, for this purpose. It could be triggered at exactly the same point all over Europe to invoke intervention by supervisory authorities.”

This approach could be implemented by the new European Banking Authority (EBA), he added.

“If Basel III comes through at the European...