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EU bank insolvency law harmonisation: What next?

Research output: Contribution to journalArticlepeer-review

Original languageEnglish
Pages (from-to)239-266
Number of pages28
JournalInternational Insolvency Review
Volume30
Issue number2
DOIs
Accepted/In press2021
Published1 May 2021

Bibliographical note

Funding Information: National budgets, however, remain exposed and the negative feedback loop intact where an institution's (part) liquidation under national insolvency law is funded by State aid (and also as long as national budgets backstop national deposit guarantee schemes). This may not matter much for smaller banks. However, the availability of this escape route for larger and even the largest and most complex institutions blows a massive hole into the EU crisis management framework. 58 Publisher Copyright: © 2021 The Author. International Insolvency Review published by INSOL International and John Wiley & Sons Ltd. Copyright: Copyright 2021 Elsevier B.V., All rights reserved.

King's Authors

Abstract

After the COVID-19 crisis has subsided, the (further) harmonization of bank insolvency law will again be high on the agenda of EU regulators and policymakers. On the basis of an analysis of the status quo pain points, this article advocates the extension of the BRRD resolution regime to all bank failures, regardless of their systemic relevance. This could be achieved by removing the public interest requirement as part of the resolution trigger. The ensuing consolidation would significantly reduce complexity and enhance the transparency and legitimacy of the EU crisis management framework.

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