Reuters: Bankruptcy News: EU Commission to adopt bank resolution scheme June 6

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EU Commission to adopt bank resolution scheme June 6 May 17th 2012, 17:12 MILAN | Thu May 17, 2012 1:12pm EDT MILAN May 17 (Reuters) - The European Commission will adopt on June 6 a proposal for winding up failing banks, the head of the banking unit at the EU executive said on Thursday. "On crisis management, we will adopt a proposal on June 6," Mario Nava told a financial conference in Milan. At the end of April a Commission spokeswoman said the aim was to present the scheme before a June 18-19 summit of the world's 20 biggest economies in Mexico. Nava said the idea behind the scheme was to ask banks to prepare a recovery plan for when they hit trouble. Regulators should also have resolution schemes ready, he said. "We believe there is a need to make the whole bank resolution process more European," he said, adding the proposal would include many references to the role of pan-European authorities during a banking crisis. He said the proposal will also include a "bail-in" mechanism, which makes banks' bondholders take a hit if a lender goes bust. "'Bail-in' will be included, seen as an alternative to a bail-out," he said. (Reporting by Valentina Za; editing by Ron Askew)

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