The United Kingdom is moving forward with plans to implement the European Union banking union, with its financial regulator proposing changes to meet requirements of the EU directive before it takes effect at year’s end.
The EU’s Bank Recovery and Resolution Directive (BRRD), also known as the banking union, established a common framework for supervising the bloc’s largest banks and financial institutions. The directive, triggered by the financial crisis, tightened prudential requirements for banks and placed about 6,000 large institutions under the direct supervision of the European Central Bank in a bid to catch problems early on. Smaller firms will remain supervised by national regulators. Last month the EU finalized a key piece of the banking union with the publication of the Single Resolution Mechanism in the Official Journal of the EU. The SRM provides a uniform process for quick winding down of failing banks, including those banks operating solely within one nation and those with cross-border operations. That piece of the regulation takes effect 19 August.
