The BBA said the EC proposals will help Europe level the regulatory playing field with the UK, which has already implemented changes.
The EC proposals are aimed at reducing the impact of financial crises in the future, increasing supervision of financial firms, and putting in place mechanisms that will ensure that firms can be allowed to fail without affecting consumers and the wider economy.
The BBA highlighted that the UK has already introduced similar measures through the Banking Act 2009 and Financial Services Act 2010, which gives the Bank of England powers to deal with failing firms. It also requires firms to have plans for recovery.
Angela Knight, chief executive of the BBA, said: “The UK banks are offering a positive lead to the EU and the banking authorities on how to build on the very real lead given by the UK, whether through the legislation passed in the last two years or the regulatory action being taken on recovery and resolution.”
She added that the banking industry was creating a sector that can grow while understanding the taxpayer cannot be expected to pay for a future failure.
Knight said: “The intervention during the financial crisis was exceptional and we fully understand this cannot happen again.
“Very real steps have been taken here in the UK and we are now seeking to build on these in Europe and internationally.”
In its response to the European Commission’s consultation, the BBA stressed that: no firm should be considered too big to fail; international co-operation is key; the new rules must be adaptable to meet unforeseen circumstances; intrusive supervision must be proportionate; and that the economic impact of the proposals must be assessed to find the right balance between stability and growth.
