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Part III Single Resolution and the BRRD, 11 Bail-In: Preparedness and Execution

Anna Gardella

From: European Banking Union (2nd Edition)

Edited By: Danny Busch, Guido Ferrarini

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 19 April 2024

Bank resolution and insolvency — Securities — Regulated activities

Bail-in is the most emblematic tool of the resolution authority’s toolkit; it epitomizes the policy goals embodied in resolution regime, notably internalization of losses to protect taxpayers and refrain from socializing banks’ failure costs. Still, the technical complexity required for its full implementation, early cases of partial application, and the incompleteness of its legislative and regulatory framework have raised criticism against the bail-in tool questioning its feasibility and credibility. Against this background, and after acknowledging that the timeline for its entry into force may have been overly ambitious, this chapter argues that the in order to ensure the credibility and feasibility of the tool, authorities and banks have to continue the preparatory work, in particular building-up the TLAC/MREL target and lay down processes for the execution of specific aspects of the implementation, also in co-ordination with other authorities and; stakeholders like capital markets authorities, regulated markets, and securities custodians.

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