A report by Assonime illustrates the management of some banking crises in the Member States of the European Union in the light of the new legal framework on the recovery and resolution of credit institutions, introduced by directive 2014/59/EU (BRRD) and by regulation no. 806/2014 (SRM regulation). The analysis, while mainly focusing on the cases that fall within the scope of application of the new rules on resolution and precautionary recapitalization, extends to some crisis situations that occurred, starting from 2012, before the enactment of the BRRD. The interest in these cases derives from the fact that some national regulations already provided for measures which were then codified at European level by the BRRD. Many cases show the evolution of the regulation of banking crises from an approach centered on the principle of public reimbursement of bank creditors (bail-out) to the principle of mandatory burden sharing by shareholders and creditors of the same (bail-in).
Assonime's analysis covers Spain, Portugal, Italy, Germany, Denmark, Slovenia, Cyprus and Greece. The new instrument of precautionary recapitalization has only been adopted three times, twice in Greece and once in Italy. The devaluation of shares and bonds, or the conversion into capital of the latter, was applied with a different extent in individual cases: holders of senior bonds were subjected to bail-in only in three cases (one in Portugal and two in Greece) and depositors above €100.000 were involved in the bail-in of some Cypriot banks, as early as 2013, and in the resolution of a Danish bank.
Attachments: Assonime Notes and Studies
