The Eurogroup has specifically agreed that the main elements of the review should be: a harmonized rewriting of the concept of public interest in order to extend the application of the resolution procedure to more banks, including smaller ones; finding more sources for resolution funding, which is necessary to make the above-mentioned extension feasible, through a greater involvement of guarantee funds and a ‘least cost criterion’ test based on common criteria at European level but managed by national authorities; and the harmonization of specific elements of Member States’ insolvency regimes to make them consistent with the European framework.
A related issue is the circularity of funds between the banking system and Mutual Funds. Banks invest in Mutual Funds and the Mutual Funds put large volume of funds back to the banking system through investments in CDs, lending in CBLO and Market Repos.