On 15 April 2014, the European Parliament adopted the Bank Recovery & Resolution Directive (the "BRRD") which sets out the rules applicable to EU banks and large investment firms in distress. The rules require banks to prepare recovery plans (note, that a lot of banks have already started this exercise). National authorities will be able to intervene with a failing bank and use powers to restructure banks or allocate losses to creditors and shareholders. National authorities will also have powers to resolve banks which have failed, avoiding taxpayer bail-outs and ensuring continuity of critical functions. The BRRD also provides for cross-border resolution of large banks, setting out the cooperation arrangements between national authorities and giving the EBA powers to mediate any disputes. The EBA will also be responsible for preparing draft Level 2 legislation.
The European Parliament's press release is available at: http://www.europarl.europa.eu/news/en/news-room/content/20140411IPR43458/html/Parliament-lifts-bank-bailout-burden-fromtaxpayers%E2%80%99-shoulders.
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