ISDA has joined the swelling chorus of the concerned about CCPs, issuing “Principles for CCP Recovery”, a short document outlining five recovery and resolution issues. Its first page introduces a new financial acronym- PONV- “point of non-viability”[1], essentially the trigger point for resolution. ISDA’s chief executive Scott O’Malia said, “This is a debate about what […]

The FDIC and the BoE have released news of a joint high-level meeting and exercise designed to “further the understanding, communication, and cooperation between U.S. and U.K. authorities in the event of the failure and resolution of a global systemically important bank, or G-SIB.” Timed to coincide with the annual 2014 IMF meeting, the event […]

The FSB has released a consultation paper on the cross-border recognition of resolution action. The FSB TBTF report previously identified cross-border legal uncertainty as one of the main stumbling-blocks to the effective resolution of a SIFI subject to multiple jurisdictions. Key Attribute (KA) 7.5 mandates the mutual cross-border recognition of resolution authority and action; existing […]

It is increasingly certain that G-SIFIs will relinquish their early termination rights against each other via an ISDA Protocol this autumn. Adherence to the Protocol, which is yet to be released, would only be open for adherence by G-SIFIs. G-SIFIs first In the FSB’s view, early termination rights linked to entry into resolution of G-SIFIs […]

The EBA has released the draft RTS on the content of resolution plans and resolvability assessment and a draft set of guidelines on measures to reduce impediments to resolution. Articles 10, 12 and 15 BRRD (Directive 2014/59/EU) mandate the EBA to draft RTS that impose common European standards, facilitating harmonisation between resolution authorities.  The draft […]

The EC has launched a public consultation to help determine the exact shape of the SRM’s bank levy. The 28 transitional national resolution funds established by the BRRD[1] will be replaced by the Single Resolution Fund (SRF) as of 1 January 2016. SRF “taxes” will be dependent on the size and risk pro-file of each […]

On 21 May 2014, the Council of the EU published an intergovernmental agreement (IGA) regarding the mutualisation of contributions to the Single Resolution Fund (SRF), part of the Single Resolution Mechanism (SRM). The SRF will be funded by contributions from banks at a national level.  Contributions will be calculated as the proportion which a bank’s […]

On 8 April 2014, just days before its final plenary session (scheduled for 14-17 April) the EU Parliament has published a revised text of the Bank Recovery and Resolution Directive (BRRD). The text appears to confirm the Parliament’s broad support of the requests made by various Member States for clarity that the extension of liquidity […]

The FT is reporting that a stand-off has developed over the EU bank recovery and resolution directive. The issue relates to the degree of support that a state can provide to an ailing bank before triggering the bail-in provisions of the directive.