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Research Handbook on Crisis Management in the Banking Sector

Research Handbook on Crisis Management in the Banking Sector

Research Handbooks in Financial Law series

Edited by Matthias Haentjens and Bob Wessels

In this timely Handbook, over 30 prominent academics, practitioners and regulators from across the globe provide in-depth insights into an area of law that the recent global financial crisis has placed in the spotlight: bank insolvency law.

Chapter 6: Cross-border cooperation between resolution authorities in the BRRD

Vincenzo Troiano

Subjects: economics and finance, financial economics and regulation, money and banking, law - academic, company and insolvency law, finance and banking law


The financial crisis has underscored, at the global level, a serious lack of legal tools and adequate links between competent authorities, capable of managing situations of crisis or insolvency concerning, inter alia, credit institutions, investment firms and financial groups. Tools of this sort should be used both with a view to preventing situations of insolvency and where insolvencies are occurring, in order to minimize negative impacts by preserving the systemically important functions of the institution affected, also in order to overcome the need to tap into funding provided by taxpayers in order to bail out such institutions. At the international level, for some time initiatives have been developed aimed at defining common principles and approaches for the creation of mechanisms for the prevention and resolution of crises concerning credit and financial institutions. Two recent legislative measures have been adopted at the EU level on this matter, namely, directive no. 2014/59/EU of 15 May 2014, (the ‘directive’ or the ‘BRRD’) and regulation no. 806/2014 of 15 July 2014 (the ‘regulation’). The directive, in particular, is aimed at establishing, within the EU, a common recovery and resolution mechanism for credit institutions and investment firms (the ‘institutions’). The legislative intervention is based upon the fact that the financial markets of the EU are strongly integrated and interconnected, with many institutions operating well beyond national borders.

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