On 12 September the Estonian Presidency held the first post-summer recess Council working group to continue discussions on the European Commission’s November 2016 proposal for a regulation setting out a recovery and resolution framework for CCPs (CCP RR). The meeting agenda included a review of the proposed provisions pertaining to group structures, as well as consideration of the provisions specifying early intervention and resolution tools. The latter point included discussions on the no-creditor-worse-off principle (NCWO), resolution planning, resolvability, general principles for resolution and resolution powers. One of the most controversial elements of the proposed regulation, i.e. provisions relating to the use of variation margins gains haircutting (VMGH), was not discussed. Member States also discussed proposals put forward by the Dutch and Austrian delegations, which are advocating for the introduction of additional measures to strengthen the protection of public funds under the proposed regulation. We understand that discussions on all of those topics are still in the initial phase.

The Estonian Presidency is expected to schedule another Council working group to discuss the CCP RR proposal in October. The legislative review is also expected to gather pace over the coming weeks in the European Parliament’s Economic and Monetary Affairs Committee (ECON). The co-rapporteurs, Kay Swinburne (UK, ECR) and Jakob von Weizsäcker (Germany, S&D) are expected to present their draft report on 22 September 2017.