European Bank Recovery and Resolution Directive: Recovery Proceedings for Cross-Border Banking Groups

36 Pages Posted: 7 Nov 2013 Last revised: 9 Sep 2014

See all articles by Valia Babis

Valia Babis

Bank of England; University of Cambridge - Faculty of Law

Date Written: October 20, 2013

Abstract

The EU bank recovery and resolution directive includes mechanisms for recovery (or “early intervention”) for groups. These are: group recovery plans, intra-group financial assistance and coordination of early intervention measures regarding groups.

But do these group provisions ensure a consistent recovery procedure for the entire banking group across borders? While recovery tools applicable to more than one group affiliate are part of the EU regulatory framework, use of such tools across borders depends on the discretion of supervisors of group affiliates. Recovery tools can only apply across group affiliates if supervisors reach joint decisions and make use of recovery tools in a consistent, cooperative and coordinated manner across the group. This means that the effectiveness of group recovery depends greatly on the institutional architecture of supervision in the EU, and in particular, the relationships between supervisors within and beyond the SSM.

Keywords: recovery and resolution directive, European Union, banking union, bank recovery, early intervention, cross-border banking groups, recovery and resolution plans, intra-group financial assistance, bank supervision

JEL Classification: K2, K20, K22

Suggested Citation

Babis, Valia, European Bank Recovery and Resolution Directive: Recovery Proceedings for Cross-Border Banking Groups (October 20, 2013). European Business Law Review, Forthcoming; University of Cambridge Faculty of Law Research Paper No. 49/2013. Available at SSRN: https://ssrn.com/abstract=2346310 or http://dx.doi.org/10.2139/ssrn.2346310

Valia Babis (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom

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