# Introduction

The common practical guidelines for crisis management provide detailed operational guidance and reflect a common understanding between the Parties of their respective role as well as of the steps and procedures to be taken in relation to a cross-border systemic financial crisis situation.
The guidelines describe what processes should be activated for:
1) strengthening crisis preparedness in normal times;
2) crisis alert;
3) crisis assessment;
4) crisis management network;
5) crisis management; and
6) external communication.
These processes should involve the cooperation and coordination among the Parties to enhance their preparedness in normal times to deal with the different stages of the crisis. The main objective of the coordination is to ensure that information is shared and that decisions, policy measures and related external communications of the Relevant Parties are coordinated and consistent.
The Parties with common financial stability concerns stemming from the presence of one or several financial groups are encouraged to develop Voluntary Specific Cooperation Agreements (VSCA) which are consistent with the MoU and which defines more detailed procedures to be put in place in normal times and to be activated in a crisis situation. As outlined in the example in attachment to these guidelines, these agreements will, in greater detail, describe the operational cooperation between Parties in the relevant countries and in relevant contexts. Well-defined governance, oversight and crisis management arrangements are also needed for systemically important financial infrastructures operating across borders.
In the VSCAs, in order to enhance crisis preparedness, the Relevant Parties may agree inter alia:

## Notes

* ↑ The EU Market Abuse Directive (Directive 2003/6/EC), Article 6.1, obliges issuers of financial instruments to inform the public as soon as possible of inside information: “Member States shall ensure that issuers of financial instruments inform the public as soon as possible of inside information which directly concerns the said issuers”. Hence, the issuers of financial instruments are in principle submitted to the obligation to disclose inside information, but there are exceptions. In case of emergency liquidity assistance, Article 6(2) of the same Directive is relevant: “An issuer may under his own responsibility delay the public disclosure of inside information, as referred to in paragraph 1, such as not to prejudice his legitimate interests provided that such omission would not be likely to mislead the public and provided that the issuer is able to ensure the confidentiality of that information”. In case of emergency liquidity assistance, there is a legitimate interest not to disclose information immediately. This is confirmed in Article 3.1 of Commission Directive 2003/124/EC of 22 December 2003 implementing the Market Abuse Directive as regards the definition and public disclosure of inside information and the definition of market manipulation: “For the purposes of applying Article 6(2) of Directive 2003/6/EC, legitimate interests may in particular relate to the following non-exhaustive circumstances: (a) … In particular, in the event that the financial viability of the issuer is in grave and imminent danger, although not within the scope of the applicable insolvency law, public disclosure of information may be delayed for a limited period where such a public disclosure would seriously jeopardise the interest of existing and potential shareholders by undermining the conclusion of specific negotiations designed to ensure the long-term financial recovery of the issuer.”
* ↑ In this regard, article 132.1 of the Capital Requirement Directive (CRD) establishes that supervisors shall share the essential information that can materially influence the assessment of the Financial Supervisory Authorities of a credit financial institution in another Member State
* ↑ Where a financial conglomerate is involved, the coordinator of the specific conglomerate will need to be involved (see FCD art. 11a 2002/87/EC)
* ↑ 6 Options have been discussed in the EFC Report (ECFIN/CEFCPE(2007)REP/53990).
* ↑ 7 Final costs and sharing of burden can be defined at a much later stage only. At this stage, broad picture on possible cost is needed to ensure decision making.