Regulatory Alerts2014-06-16
Europe's New Recovery and Resolution Regime for Credit Institutions
The Deutsche Bundesbank outlines the European Union's new framework for bank failure management, comprising the Bank Recovery and Resolution Directive (BRRD) and the Single Resolution Mechanism (SRM). These measures aim to eliminate taxpayer-funded bailouts by establishing a bail-in tool that forces shareholders and creditors to absorb losses before public funds are used. The regime mandates comprehensive recovery and resolution planning while creating a centralized resolution authority and fund for participating member states to ensure financial stability.
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