Regulatory Alerts2016-11-07
Classification of certain liabilities of CRR institutions under insolvency law
German financial authorities amended section 46f of the Banking Act to establish a priority insolvency ranking for specific debt instruments issued by CRR institutions, effective 1 January 2017. The amendment grants priority treatment to non-debt instrument claims while explicitly defining tradable debt instruments, money market instruments, and structured financial products subject to specific bail-in cascades. By clarifying these classifications, the rule streamlines resolution proceedings and mitigates contagion risks through predictable loss allocation for shareholders and creditors.
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