Research Handbooks in Financial Law series
Edited by Matthias Haentjens and Bob Wessels
Chapter 6: Cross-border cooperation between resolution authorities in the BRRD
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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