Introduction On 14 October, the Bank of England published a speech given by Paul Tucker, Deputy Governor Financial Stability, at the Institute of International Finance 2013 Annual Membership meeting on 12 October 2013 on the subject of ‘too big to fail’. Mr Tucker made five general points: The US authorities could resolve most US SIFIs […]

Introduction On 8 October 2013, HM Treasury published a draft annex on the new bail-in option to the Special Resolution Regime (SRR). The bail-in tool is being introduced through amendments to the Banking Act 2009 by the Banking Reform Bill 2013 for the purpose of offering a new stabilisation option to the Bank of England […]

On 27 June 2013, the EU Council published a press release confirming an agreed position with respect to the Recovery and Resolution Directive (RRD) and calling on the EU Presidency to start trilogue negotiations with the EU Parliament with a view to adoption of the RRD at first reading before the end of 2013. The […]

The FT is reporting that EU Council finalised bail-in rules early this morning, agreeing that: as expected, insured deposits under EUR 100,000 will be exempt, and uninsured deposits of individuals and SMEs will be given preferential status; a minimum of 8% of total liabilities must be bailed-in before resolution funds can be used, whilst above […]

Some noteworthy signs of progress over the weekend from the EU with respect to bail-in guidelines. The FT reported on Sunday night that a majority of the Council of Ministers supported an exemption for small and medium-sized enterprises (SMEs), as well as the widely-flagged exclusion of all deposits by individuals, from the ambit of bail-in […]

Pursuant to Article 38(3) of the original EU Commission proposal for a EU Directive establishing a framework for the recovery and resolution of credit institutions and investment firms (the “RRD”), resolution authorities may exclude derivatives transactions from the scope of the Bail-in tool if that exclusion is “necessary or appropriate” to: ensure the continuity of […]

On 21 May 2013, the European Parliament’s Economic and Monetary Affairs Committee (ECON) published a press release detailing its negotiating position with respect to certain elements of the proposed Recovery and Resolution Directive (RRD). The negotiation position was approved by 39 votes to 6 and states that: the “bail-in” scheme should be operational by January […]

Here is a link to an article which reports that ISDA has drafted a proposal to add a new credit event for financial credit default swaps.  The proposal is in response to the: introduction of the European Commission’s bail-in framework (part of a package of legislation aimed at bolstering bank recovery and resolution) which will […]

On 14 May 2013, the Economic and Financial Affairs Committee of the EU Council published a press release following a debate on the proposed Recovery and Resolution Directive (RRD).  The discussion focused on the design of the bail-in tool, identified as a central issue.  A summary of the key points include: General agreement on the […]