The pending EU risk reduction package is highly relevant for the
whole EU banking sector. It addresses the capital provisioning
required by banks to facilitate potential resolution measures by
resolution authorities if a bank is failing or likely to fail. The
reform package spells out which instruments banks may use to
fulfill these capital provisioning requirements and how to compute
their amount in different corporate, group or consolidation
structures. Further aspects are reporting and disclosure
requirements, the competent authorities' powers in case of
breaches, as well as consumer protection, requiring banks to ensure
that consumers are not offered instruments that will be bailed-in
or written-down first in the issuing bank's resolution.
Read the full White Paper.
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