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Part III Single Resolution and the BRRD, 13 The Architecture of the Brrd—a UK Perspective

Simon Gleeson

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: 24 June 2024

Bank resolution and insolvency

The UK was one of the few EU countries to have a fully developed bank resolution legislative scheme in place prior to the Bank Resolution and Recovery Directive (‘BRRD’), and the architecture of the BRRD owes much to the UK model. However, the process of implementing the BRRD approach in the UK created challenges which highlighted the underlying policy choices within the BRRD, and demonstrated that the underlying model of the structure of resolution within the BRRD is very different from that assumed in the UK (and, in passing, the US). It also demonstrated that the BRRD is to some extent intended to operate in tandem with the Single Resolution Mechanism (‘SRM’) as well as EU State Aid guidelines; this is particularly clear when it comes to issues such as the establishment and operation of resolution funds and the conduct of bail-in. The chapter explores these issues, seeks to identify the extent to which the BRRD and the UK statutory approaches are compatible, and uses incompatibilities to identify the underlying intellectual architecture of the BRRD structure. Finally, the onset of Brexit presents a new set of challenges for both UK and EU resolution authorities, and the chapter examines the extent to which these may be significant in the future.

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