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BRRD Labyrinth Roadmap

With only 161 days until the creditor writedown portion of the BRRD comes into force, it is imperative that both banks and their creditors have complete understanding of the potential post- 1 January 2016 consequences. However, Article 55(3) BRRD is not a straight road leading to clarity; the long list of overlapping exceptions to bail […]

Contractual Bail-In Creates Monster Document Headache

Introduction On 3 July 2015 the European Banking Authority (EBA) published final “Draft Regulatory Technical Standards on the contractual recognition of write-down and conversion powers under Article 55(3) of Directive 2014/59/EU” (the BRRD). The requirement to include Write-Down Clauses In order to guard against the possibility that a third country court may not recognise the […]

EBA Demands Insight into Financial Contracts

Introduction On 6 March 2015, the European Banking Authority (EBA) published a consultation paper containing a “Draft Regulatory Standard on a minimum set of the information on financial contracts that should be contained in the detailed records” required by the Bank Recovery and Resolution Directive[1](BRRD). The consultation period closes on 6 June 2015 so as […]

EC Q&A BRRD- elements of reflection

The European Commission has helpfully published a document in excel format, grouping questions and answers by their respective BRRD articles. The document also refers to more general questions regarding BRRD transposition and interaction with other EU legislation. The Commission clarifies that the document has no legislative force, but serves to provide “elements of reflection” , […]

RRP: Shining a Light on Financial Contracts

Introduction As a firm, do you know the detailed contents of your portfolios of derivatives and securities financing contracts?  The Bank of England[1] wants to know, and will soon have the power to compel you to provide this information. The Bank Recovery and Resolution Directive (“BRRD”) mandates competent authorities of Member States to require an […]

Resolution Planning (nearly) resolved

The EBA has released the draft RTS on the content of resolution plans and resolvability assessment and a draft set of guidelines on measures to reduce impediments to resolution. Articles 10, 12 and 15 BRRD (Directive 2014/59/EU) mandate the EBA to draft RTS that impose common European standards, facilitating harmonisation between resolution authorities.  The draft […]

EU Agrees ‘Big Bazooka’ for Failing Banks

On 21 May 2014, the Council of the EU published an intergovernmental agreement (IGA) regarding the mutualisation of contributions to the Single Resolution Fund (SRF), part of the Single Resolution Mechanism (SRM). The SRF will be funded by contributions from banks at a national level.  Contributions will be calculated as the proportion which a bank’s […]

EU Banking Reform: unity is strength?

At its last plenary session before electoral recess, the European Parliament has passed three laws cementing the foundations of an EU-wide banking union. The Single Resolution Mechanism, passed by 770 to 88 with 13 abstentions, limits the contentious role of national governments, resolutions will be triggered by an ECB-led decision, effective as of 1st January […]

Last Minute Loss of Nerve Over TBTF?

The FT is reporting that a stand-off has developed over the EU bank recovery and resolution directive. The issue relates to the degree of support that a state can provide to an ailing bank before triggering the bail-in provisions of the directive.

UK Consults on Bail-in

On 13 March 2014, HM Treasury published a consultation document on the implementation of bail-in pursuant to the Financial Services (Banking Reform) Act 2013. The consultation is open for comment until 7 May 2013 and seeks comments on three draft statutory instruments: The Building Societies (Bail-in) Order: which facilitates the exercise of bail-in in relation […]

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