The European Commission has requested Belgium to fully implement two central finance directives. In both cases the Commission’s request takes the form of a reasoned opinion. If Belgium fails to comply within two months, the Commission may decide to refer the country to the Court of Justice of the EU.
The first directive is the Bank Recovery and Resolution Directive (BRRD; Directive 2014/59/EU). The deadline for the transposition of these rules into national law was 31 December 2014. However, to date, Poland, Belgium and Slovenia have failed to implement these rules into their national law.
This directive is a centerpiece of the EU’s Banking Union that was put in place to create a safer and sounder financial sector in the wake of the financial crisis.
The new BRRD rules 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.
However, to date, Belgium, Latvia, the Netherlands and Slovakia have failed to fully implement this Directive into national law, with some provisions – mostly related to the national competent authorities’ discretions – still incomplete.
This directive sets out the prudential requirements for financial institutions established in the European Union.
In particular, it sets out the rules on the licensing and supervision of institutions, supervisory cooperation, risk management, corporate governance (including remuneration) and capital buffers, which is the mandatory capital that financial institutions are required to hold in addition to other minimum capital requirements.
The Brussels Times (Source: The European Commission)