Exit Policy Co-ordination at EU Level

Those national legal systems that served as points of reference for the design of our proposed new scheme for orderly exit are sufficiently incompatible in case administration to make it difficult to contemplate the adoption of any single set of international rules and standards on exit policies in the near future. The need for a prior reform of national law to remedy the observed lack of convergence of national legislation accounts for the current lack of agreement between countries on reallocation of authority or jurisdiction over cross-border banks and financial conglomerates. However, even without resolving the fundamental issues it should be possible to get agreement on three problems of allocation of home and host country authority and jurisdiction. These are inadequate information, conflicts of interest, and lack of power for the authorities to do what is required of them under the Basel code, given the current division of responsibilities between home and host countries. There is a compelling case for a modest interim regime, as any ideal agreement on a full range of issues will take years to negotiate and implement. If no such progress is made, efforts to deal with cross-border bank insolvencies in an orderly manner will be thwarted.