EU watchdog says will visit banks to check on their crisis plans
LONDON (Reuters) -The European Union's body for winding down failing banks said on Wednesday it would begin on-sight inspections of leading euro zone lenders to check they can be wound down without taxpayer aid in a crisis.
The Single Resolution Board was set up after taxpayers had to bail out lenders during the global financial crisis in 2007-09.
Its first phase was to require banks to have "resolution" plans setting out how they could recover from a crisis, or be wound down smoothly without public aid.
Dominique Laboureix, newly-appointed chair of the Single Resolution Board, told the European Parliament that the watchdog's "second phase" for 2024-2028 would focus on whether the plans were likely to work in practice.
"We will undertake a strategic review this year," Laboureix, a former French banking regulator, told parliament's economic affairs committee.
"While in phase one the focus was rightly on putting resolution plans into place, in the coming years the SRB must shift its focus to make sure that resolution plans can be put into practice effectively," Laboureix said.
"This means testing and checking that the resolution plans actually work in... simulation. This means having on-site inspections at banks' premises," he added.
(Reporting by Huw Jones; Editing by Raissa Kasolowsky and Alex Richardson)