Single Resolution Mechanism

Project Start:01/2014
Status:Completed
Researchers:
Category: Financial Intermediation
Funded by:LOEWE

EU leaders have pledged to break “the vicious cycle between sovereigns and banks” by establishing a European banking union. A pivotal pillar of the new regulatory architecture will be its resolution regime, i.e., the centralization of decision-making processes and competences for the forced resolution of insolvent or near-insolvent banking institutions. The Commission has recently published a proposal for a Single Resolution Mechanism (SRM). The future discussion of both the normative desirability of certain regulatory structures and the practical problems of their implementation will receive the attention of regulators, regulated institutions, legal practitioners and academics, as the E.U.-legislative process develops further during the coming months.

This project will contribute to the analysis and evaluation of the evolving resolution regime. It will embrace insights from research on bank resolution in economics and conduct comparative legal analyses. It will thus have a broad and interdisciplinary basis to contribute to both the academic and the policy debate.

Specific subjects that will receive special attention are:

− “Normal times” interaction between SRM-institutions and prudential supervisors in the Single Supervisory Mechanism (SSM), e.g. early intervention measures, exchange of information procedures for reorganization and resolution planning

− Resolution decision making in cross-border scenarios (single vs. multiple points of entry strategies).

− Early intervention decisions, prompt corrective action, and the adequate valuation of assets.

− Resolution instruments and the decision processes that lead to their application, e.g. bail-in and pre-insolvency property rights, waterfall, no creditor worse-off principle).

− The interaction between the proposed infrastructure and national infrastructures (including both supervisory authorities and deposit insurance schemes), with regard to the financing of resolution instruments.

− Legal redress against decisions taken at both the E.U. level and by national authorities operating in co-operation with the SRM.

 

Related Published Papers

Author/sTitleYearProgram AreaKeywords
Jens-Hinrich BinderTo Ring-Fence or Not, and How? Strategic Questions for Post-Crisis Banking Reform in Europe
forthcoming in European Banking Regulation (CH Beck)
2018 Financial Intermediation
Jens-Hinrich BinderKomplexitätsbewältigung durch Verwaltungsverfahren?
Zeitschrift für das gesamte Handels- und Wirtschaftsrecht
2015 Financial Intermediation
Tobias TrögerRegulatory Influence on Market Conditions in the Banking Union
European Business Organization Law Review
2015 Financial Intermediation banking union, macro-prudential supervision, real estate lending, bail-in, market discipline

Related Working Papers

No.Author/sTitleYearProgram AreaKeywords
109Tobias TrögerRegulatory Influence on Market Conditions in the Banking Union2015 Financial Intermediation banking union, macro-prudential supervision, real estate lending, bail-in, market discipline
179Tobias TrögerToo Complex to Work: A Critical Assessment of the Bail-in Tool under the European Bank Recovery and Resolution Regime2017 Financial Intermediation bail-in, private sector involvement, precautionary recapitalization, cross-border insolvency, market discipline
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