Survey of Resolution and Restructuring in Europe: Pre- and Post-BRRD

Christian McNamara, Carey Mott (), Salil Gupta (), Greg Feldberg () and Andrew Metrick
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Carey Mott: YPFS, Yale School of Management, https://elischolar.library.yale.edu/journal-of-financial-crises/
Salil Gupta: YPFS, Yale School of Management, https://elischolar.library.yale.edu/journal-of-financial-crises/
Greg Feldberg: YPFS, Yale School of Management, https://elischolar.library.yale.edu/journal-of-financial-crises/

Journal of Financial Crises, 2024, vol. 6, issue 1, 1-34

Abstract: This paper surveys 19 case studies of bank resolutions and restructurings across 15 Key Design Decisions. It focuses on interventions that occurred in Europe both in the years leading up to the adoption of the Bank Recovery and Resolution Directive (BRRD) in 2014 (when many jurisdictions were constrained by a lack of legal authority) and in the years after the BRRD was in place. The main themes that emerge are: (a) the need for resolution and restructuring to eliminate uncertainty about an institution's solvency by closing it, recapitalizing it, or merging it with a healthier institution; (b) the importance of effective valuation in achieving this result; (c) the necessity of clarity in the treatment of creditors; and (d) the value of a credible bail-in tool to incentivize creditors to agree to solutions outside of resolution.

Keywords: bankruptcy; resolution; restructuring (search for similar items in EconPapers)
JEL-codes: G01 G28 (search for similar items in EconPapers)
Date: 2024
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