ZBB 2024, 70
Cross-Border Bank Resolutions and its Challenges
This article comprehends a very selective analysis of some aspects deemed of extreme relevance to ensure effective cross-border resolution strategies, dealing with global systemically important banks G-SIBS, and also involving financial institutions with no systemic dimension but which operate in multiple jurisdictions. It is discussed, namely, the fact that G-SIBS, as Credit Suisse, and other multi-jurisdictional groups, highlight critical issues of resolution planning when dealing with several jurisdictions. Secondly, this analysis also highlights particular problems in implementing cross-border resolution strategies to be applied to some banking sub-sectors, namely as regards the case study of cooperative banks, which are an important part of the European financial landscape. Thirdly, the article briefly addresses some critical issues of bail-in when dealing with private actors from different jurisdictions.
This overall analysis starts from a critical discussion of the financial turmoil of March 2023, debating if this might have affected the relevance and credibility of resolution regimes.
Contents
- I. Introductory Remarks
- 1. Resolution regimes and the recent financial turmoil
- 2. Key factors underlying the recent financial turmoil
- 3. Analytical roadmap on cross-border resolution issues
- 4. The EU resolution regime and the CMDI Proposal
- 5. Foreseable outcome of the CMDI Proposal
- II. G-SIBS – Multi-Jurisdictional Groups and Critical Issues of Resolution Planning
- 1. Scope of intervention of the SRB and cross-border resolution issues
- 2. Cross-border issues pertaining to resolution planning
- 3. Coordination between different jurisdictions
- 4. Resolution planning and bilateral agreements involving different jurisdictions
- III. A Particular Case Study – Cooperative Banks
- 1. Diversity of the European banking system – the case of cooperative banks
- 2. Particularities of cooperative banking groups and cross-border resolution issues
- 3. Supranational networks of cooperative banks
- IV. Critical issues of bail in in scenarios involving different jurisdictions
- 1. Preliminary considerations
- 2. Bail-in and suspension of dealings of securities
- 2.1 Bail-in of debt issued under the law of another jurisdiction
- 2.2 Write-down of equity and CSDs
- 2.3 Resolution funding
- V. Concluding remarks
- *
- *)Professor of Lisbon Law University (FDUL); Jean Monnet Chair (Economic Regulation in the EU); Chairman CIRSF (Research Centre on Supervision and Regulation of the Financial Sector); Vice Chair of Appeal Panel of the Single Resolution Board/SRB; Chair of the Supervisory Council of the Portuguese Insurance and Pension Funds Supervisory Authority (ASF). Attorney-at-law (Founder and managing partner of LSM Advogados, Law Firm, based in Lisbon).
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