http://www.telegraph.co.uk/finance/financialcrisis/9298487/Draft-EU-bank-resolution-law-main-points.html

Draft EU bank resolution law: main points

Bailing-in debt

• This refers to writing down "all liabilities" of a bank, such as shares and all debt to shore up capital depleted by market shocks. An earlier draft had spoken of only shares and a narrower, special class of debt that would be bailed in;

• It will also cover additional Tier 1 or Tier 2 debt but not client assets, pensions and salaries, liabilities backed by collateral and assets.

• About 10pc of a bank's debt, excluding its regulatory buffers, should be bail-inable, meaning it can be converted into equity to shore up core capital levels if the lender is in trouble.

• Bail-in would be in strict asset order until enough capital has been raised. It would start with the cancellation of shares, then move on to reducing the bank's regulatory capital to zero, followed by writing down subordinated debt, with other liabilities then written down;

• The ability to bail-in any eligible liability would apply to all existing and new debt from January 2018, meaning existing debt contracts would have to be rewritten by then;

• Even the failure by a bank to include a bail-in clause in its debt would not prevent the resolution authority from being able to write down the debt and converting it into equity;

Supervisors

• Each EU state must have a bank resolution authority.

• National supervisors will get a set of tools and powers to intervene early in an ailing bank with the European Banking Authority sketching out how early supervisors should step in.

• The resolution tools should include transferring problem assets, selling off parts of the business and bailing in.

• Supervisors would be able to appoint someone to take charge of the troubled bank.

• Banks would have to draw up recovery and resolution plans -- dubbed "living wills" -- that would be activated if they get into trouble or cannot be saved.

• Lenders may need to change their business structures in order to make these plans workable;

• EU to agree on a common "trigger" for determining that a bank must be resolved or wound down. Supervisors would intervene if a bank is "failing or likely to fail" and before having to establish if the bank is already insolvent;

• European Banking Authority help coordinate national resolution authorities and mediate if necessary;

Resolution funds

• The draft law maps out a European System of Financing Arrangements made up of national resolution funds to bail out failed banks.

• The national funds would be obliged to help out other EU countries bail out a bank if needed, but also have the right to borrow from other national resolution funds;

• A national resolution authority would not have to lend to another country more than half the funds it has;

• Tapping resolution funds would be the last resort, only used to fill any financial hole remaining after writing down all shares, bonds and capital buffers of the bank;

• Each national resolution fund would have 10 years to raise the equivalent of 1 percent of covered bank deposits, using levies on banks or other means;

• The European Commission should consider in 2014 going beyond a network of national resolution funds and how a more integrated EU framework for resolving cross-border banks might be best achieved.

and.....

http://www.telegraph.co.uk/finance/financialcrisis/9298641/Increasing-crisis-of-confidence-in-the-EU.html

By Bruno Waterfield, in Brussels

8:06PM BST 29 May 2012

12 Comments

The Pew Global Attitudes Project polled 8,000 people in France, Germany, Spain, Italy, Greece, Poland, Britain and the Czech Republic from mid-March to mid-April and identified unprecedented levels of discontent with the EU.

"The European project, which began with the creation of a small common market in 1957, grew to a larger single market in 1992 and then created the single currency in 2002, is a major casualty of the sovereign debt crisis," the report concluded. "Majorities or near majorities in most nations now believe that the economic integration of Europe has actually weakened their economies."

At a time when the EU is pushing closer to an economic and fiscal union for the eurozone, popular opinion is pulling the other way. That contradiction has led to electoral upsets across Europe, from Greece to the Netherlands and France in the past three months alone.

Majorities in most countries now blame EU integration for damaging their economies, but the figures hit 70pc in Greece, 63pc in France and 61pc in Italy, all countries once regarded as staunchly pro-European.

Just one third of people – 34pc – believe that economic integration, a central plank of the EU's raison d'etre, is a benefit.

Even in Britain, which remains outside the euro and with greater control of economic sovereignty, 61pc believe integration has damaged the economy.

Only in Germany is there a majority, 59pc, who think the EU has been good for their economy, a view borne out by the country's trade surpluses.

"Europe is experiencing a full-blown crisis of public confidence: in the benefits of European economic integration, in membership in the EU and in the euro," said Bruce Stokes, the director of the Pew Global Economic Attitudes Project.

Popular opposition to give the EU more powers to oversee national budgets, has become widespread at a time when many countries are preparing to ratify a fiscal pact enshrining European restrictions on spending into their constitutions.

Ireland goes to the polls in a referendum on the treaty on Thursday, signed by all 25 countries except Britain and the Czech Republic.

http://www.zerohedge.com/news/waiting-godot-existential-eurocrisis-edition