The EU is set to unveil new proposals today for improving its crisis-management framework for the banking system. Europe’s recovery and resolution rules for lenders have proven too inflexible for some countries, while others have faulted them for loopholes, especially when it comes to small and medium-sized banks. Though the new rules have been years in the making, they were brought into focus after the recent turmoil in the US saw several smaller lenders collapse. Concerns Europe could face a similar fallout were intensified by the woes of Credit Suisse. As we told you last month, the European Commission wants to make it easier to wind down banks that fail by tapping national deposit guarantee systems for funding to protect uninsured bank depositors above 100,000 euros. This would maintain financial stability and limit the impact on the real economy without using public funds, according to draft documents we’ve seen.

— Jorge Valero and Max Ramsay

Tags: #banking-crisis-management