Research Handbook on Cross-Border Bank Resolution
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Research Handbook on Cross-Border Bank Resolution

Edited by Matthias Haentjens and Bob Wessels

Since 2008, many countries across the globe have witnessed the introduction of new recovery and resolution regimes for banks. Whereas much may have been achieved on regional levels, this has not been perfect, and many global challenges remain unsolved. The Research Handbook on Cross-Border Bank Resolution analyses the strengths and weaknesses of the current regulatory framework for cross-border bank crises with contributions from eminent experts from the US, EU, Japan and China. The topic is addressed from both economic, and legal perspectives, with a special section devoted to real-life cases.
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Chapter 5: The EU bank resolution rules and national insolvency law

Lynette Janssen

Abstract

The Bank Recovery and Resolution Directive strengthened and harmonized the bank resolution frameworks of the EU Member States. It introduced an administrative, non-judicial resolution procedure to mitigate risks to financial stability and ensure continued access to critical functions if a bank fails. The insolvency laws of the Member States play an important role in the national resolution frameworks. The EU bank resolution rules require specific results in national law and refer to national insolvency law for their application and interpretation. For example, insolvency law determines the priority amongst creditors in bail-in and governs the conditions and procedures for the liquidation of (a part of) a bank. The analysis shows that important differences exist between the national bank resolution and insolvency frameworks as a result of differences in national insolvency laws. The observations might be relevant in academic and policy discussions about the further harmonization of the EU bank resolution framework.

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