IRSG principles for the Recovery and Resolution Directive

Published 4 Dec 2013

The IRSG has prepared a paper outlining principles for the EU Bank Recovery and Resolution Directive. In particular the Group highlights:

• A clear articulation of resolution objectives, including a clear focus on preserving and maximising value for bank creditors, consistent with no public bail-outs and no contagion
• A firm commitment to the creditor hierarchy, with discretion on bail-in scope kept to an absolute minimum (“constrained discretion”)
• Guidance on how resolution authorities will take resolution decisions, for example through the publication of a Code of Practice by resolution authorities
• Greater disclosure of resolution authorities’ “presumptive resolution paths” (the presumed baseline resolution strategy) for the resolution of specific institutions