Background
The Recovery and Resolution Directive, the legislative cornerstone of the EU's response to the problem of 'too big to fail' banks, has been passed by lawmakers in the European Parliament. The legislation paves the way for European Union countries to create a consistent set of national laws to implement the Financial Stability Board's 'Key Attributes of Effective Resolution Regimes for Financial Institutions', including the power to 'bail-in' bank creditors.
But there is still a long way to go to make systemically important banks resolvable. This paper highlights key areas of focus for senior management as they look to embed resolution planning into their business-as-usual practices, including integrating the effect of bail-in resolution strategies, enhancing data capabilities (particularly for the purpose of performing valuations), ensuring operational continuity, and making the right links with other regulatory requirements.
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The Recovery and Resolution Directive: Putting theory into practiceThe content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
