The crisis management of smaller banks: perspectives of reform

32 Pages Posted: 27 Jan 2024 Last revised: 15 Feb 2024

See all articles by Irene Mecatti

Irene Mecatti

Law Department- Siena University; European Banking Institute

Multiple version iconThere are 2 versions of this paper

Date Written: January 26, 2024


The current common framework for bank crisis management and national deposit guarantee schemes (CMDI) is tailored for banks which are considered too big (or too complex) to fail. Smaller banks are de facto excluded from the application of resolution, even though they are obliged to contribute to its functioning. In practice, not even the size element has been decisive and the crises of significant as well as less significant institutions have been managed at the national level instead of within the framework and conditions foreseen by the BRRD. The consequent and persistent fragmentation in the European financial market requires that the dichotomy between resolution and liquidation be overcome and that the scope of resolution also include smaller banks. The paper analyses the main reforms needed to achieve this goal, including the European Commission's recent proposal to revise the CMDI.

Keywords: banking union, CMDI reform, resolution, liquidation, deposit guaratee schemes

JEL Classification: 01, G18, G21, G28, K22, K23

Suggested Citation

Mecatti, Irene, The crisis management of smaller banks: perspectives of reform (January 26, 2024). European Banking Institute Working Paper Series no. 163, Available at SSRN: or

Irene Mecatti (Contact Author)

Law Department- Siena University ( email )

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