‘Bank Resolution Regimes in Europe – Part I: Recovery and Resolution Planning, Early Intervention

Abstract:

On 6 June 2012 the Commission published its long awaited Proposal for a Directive of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms. The envisaged regime rests on 'three pillars': (i) preparatory and preventive measures; (ii) early intervention; and (iii) resolution tools and powers. This paper seeks to provide an overview and critical assessment of the Commission's Proposal. In two parts, it analyses recovery and resolution planning, early intervention measures and resolution tools and powers under the Proposal and in the context of the resolution regimes currently in place, or planned, in the UK and Germany, the two largest economies in the EU. The aim is to ascertain whether and to what extent the implementation of the Proposal would necessitate changes to these regimes were it to become law in its current form, and consequently where the most difficult policy debates are likely to arise in the course of further negotiations.