BRUSSELS (Reuters) - The European Union agreed on Monday to renew the mandate of Elke Koenig, the German head of the European Union’s body in charge of disposing of failing banks, for another five years.
Koenig, who has chaired the Single Resolution Board (SRB) since its creation in 2014, currently has a three-year mandate that expires in December.
The decision to extend her term was formalized by EU governments on Monday after the European Commission and the European Parliament had backed the move.
Koenig has this year overseen the first wind-down of a euro zone bank under new rules aimed at reducing taxpayers’ costs when lenders fail.
The SRB’s decision, together with the EU Commission, to force the sale of Spain’s ailing Banco Popular to rival Santander in June has sparked a record number of lawsuits from bondholders who have seen their investment wiped out in the process.
The decision also erased shareholdings but avoided a full liquidation of the bank and spared depositors. It was deemed a “success” by EU regulators.
A few weeks after winding down Banco Popular, the SRB decided not to intervene in the rescue of two smaller Italian banks from the Veneto region, Banca Popolare di Vicenza and Veneto Banca.
The decision allowed the Italian government to provide state aid to the two lenders with laxer conditions than in an SRB rescue, prompting accusations that EU banking rules were being applied inconsistently.
The SRB said it had declined to intervene because the banks were small and did not pose risks to the euro zone’s financial stability.
Koenig has also championed strict capital requirements for the 142 major euro zone banks under her watch to make sure they hold sufficient buffers that could be written off, or bailed-in, if they collapse.
Reporting by Francesco Guarascio; Editing by Kevin Liffey
Our Standards: The Thomson Reuters Trust Principles.