Category: Recovery and Resolution Plans
Bail-in Begins to Take Shape
Introduction On 8 May 2013, the EU Council published a note regarding the “state of play” of on the proposed Recovery and Resolution Directive (RRD). The design of the bail-in tool has been identified as a central issue with three main approaches (all of which adopt preferential treatment for insured depositors and provide for a […]
The Road to Non-Bank Resolution
On 6 May 2013, the EU Commission published a roadmap regarding a framework for crisis management and resolution for financial institutions other than banks (i.e. central counterparties, central securities depositories, insurance and reinsurance firms, payment systems, investment funds and certain trading venues). The roadmap follows the consultation paper published on 5 October 2012, a summary […]
CCP Loss Allocation Rules
This is a link to an interesting paper published by the Bank of England relating to CCP loss allocation rules (first spotted over on The OTC Space). The paper explains the reasons why CCPs must maintain a matched book at all times and the process typically followed on the occurrence of a clearing member default. […]
Consideration of RRD Delayed Again
On 25 April 2013, the EU Parliament published an update to its procedure file confirming that its consideration of the Recovery and Resolution Directive (RRD) will now take place at the plenary session scheduled for 21 to 24 October 2013. Previously it had been indicated that the RRD would be discussed at the plenary session […]
FCA Update on RRP and CASS
On 26 April 2013, the FCA published Policy Development Update No 157. This summarises the anticipated publications dates for various pieces of regulatory guidance. Of note are the following: a policy statement (PS12/5) to CP11/16 on recovery and resolution plans, due for publication in Q2 2013; a policy statement to part 2 of CP12/22 on […]
FRB and FDIC Raise the Bar in RRP
On 15 April 2013, the Federal Reserve Board (FRB) and Federal Deposit Insurance Corporation (FDIC) issued a press release providing revised guidance for large US banks and foreign banks with USD 250 billion or more in total nonbank assets in completing their 2013 resolution plan submissions and granting an extension to the filing date for […]
First FSB thematic peer review report on resolution regimes
Introduction On 11 April 2013, the Financial Stability Board (FSB) published its first “Thematic Review on Resolution Regimes” (the “Review”). The objective of the Review is to evaluate FSB jurisdictions’ existing resolution regimes and any planned changes to those regimes using the FSB’s “Key Attributes of Effective Resolution Regimes for Financial Institutions” (“KAs”) as a […]
ECB Opinion Reveals Approach to “Principle of Proportionality” under RRP – in a Manner of Speaking
On 19 April 2013, pursuant to a request from the Austrian Ministry of Finance, the European Central Bank (“ECB”) published an opinion (dated 11 April 2013) on certain draft Austrian recovery and resolution planning (“RRP”) legislation – the draft Banking Intervention and Restructuring Act and associated amendments to the Federal Banking Act and the Financial […]
Barnier Tries to Force the Pace of EU Banking Reform
On 11 April 2013, Michel Barnier, European Commissioner for Internal Market and Services, gave a speech on the EU’s long-term financing needs, during which he touched upon the current status of the Recovery and Resolution Directive (RRD) and EU banking reform. M Barnier remains open to the introduction of the EU bail-in regime before 2018, […]
Cross-border Resolution Compromised by US capital and liquidity plans?
This is a link to an article in Risk Magazine regarding proposed US capital and liquidity rules for foreign banks that may undermine attempts to address the issue of “too-big-to-fail” with respect to international banking institutions. In December 2012, the Federal Reserve Board published proposals designed to provide greater comfort that US operations of foreign […]