Introduction On 7 June 2016, the EU Commission adopted a Delegated Regulation (and related Annex) specifying a minimum set of information on financial contracts that must be maintained by institutions and the circumstances in which the requirement should be imposed, as required by Article 71(7) of the Bank Recovery and Resolution Directive[1] (BRRD).  If neither […]

Austria yesterday became the first country to exercise full powers conferred by the BRRD. The Financial Market Authority (FMA) as the resolution authority under the Bank Recovery and Resolution Act (BaSAG – Bundesgesetz über die Sanierung und Abwicklung von Banken) applied the following resolution measures to HETA: 100% bail-in of all subordinated liabilities 98% of […]

The EC yesterday adopted a Delegated Regulation supplementing the BRRD. The regulation contains a number of RTS in the following areas: Content of recovery and resolution plans. EBA final drafts published in July 2014 and December 2014 Article 6(8). Principles and minimum criteria for assessment of recovery and resolution plans. EBA final draft published in […]

The PRA yesterday issued a consultation paper (CP)proposing to make permanent its time-limited 25 November 2015 waiver of Article 55 BRRD compliance, in respect of phase 2 liabilities. The waiver took effect via modification by consent, the consent being that of the PRA. If granted, the modification is valid until the earlier of 30 June 2016, […]

On 29 January, the BoE announced a public consultation defining new capital requirements for all ringfenced retail lenders. The consultation proposes the imposition of a “systemic risk buffer” (SRB) on banks and building societies, ensuring that critical financial services are maintained even in highly-stressed periods. The buffer is scaled in according to total risk-weighted assets, […]

On 30 December 2015 the Central Waivers Team of the FCA published a “modification by consent” of its Article 55 BRRD transposition, which itself came into force on 1 January 2016. Although acting to disapply IFPRU 11.6.3R, the modification direction replicates the short-term waiver issued by the PRA on 25 November 2015, enabling an agreed […]

The PRA has today issued a short-term waiver in respect of phase 2 liabilities under its transposition of Article 55 BRRD. Its rules require firms to amend contracts with 3rd country counterparties, to include a term that subordinates liabilities to the Bank’s resolution authority, a contractual recognition of bail-in. The requirement was imposed via a […]

On 24 September 2015, the Association for Financial Markets in Europe (AFME) published a “Model clause for the contractual recognition of bail-in under Article 55 of the BRRD” (a “Write-Down Clause”).  The model clause is designed for use by UK issuers of New York law governed debt securities. In its “Draft Regulatory Technical Standards on […]

Jonathan Hill, European Commissioner for Financial Stability, Financial Services and Capital Markets Union, delivered the keynote speech to the 2015 European Banking Federation Conference. Entitled “A Brave New World for Banks”, having enumerated the diverse challenges that European banks face imminently and the longer-term demographic doom, Commissioner Hill concludes: “I cannot promise you a Brave […]