Banking Crisis Management, Recovery and Resolution Planning, and “New Governance” Theory: Approaching “Living Wills” as a Public-Private Collaborative Form of Regulation

Minto Andrea ()
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Minto Andrea: Ca’ Foscari University of Venice and University of Southern Denmark. Policy Adviser at the Deutsche Bundesbank Eurosystem.I am indebted to the SRB staff for their practical suggestions on how to improve the analysis. I would like to thank all the Bundesbank staff members who contributed with useful input and fruitful discussions. In particular, I would like to thank Emanuele Spina, Senior Legal Expert in Banking Regulation and Resolution at the Single Resolution Board, and Thomas Droll, Head of Section Makroprudenzielle Überwachung des Nicht-Bankensystems, DG Financial Stability – Deutsche Bundesbank Eurosystem, for their comments on earlier drafts. I am also grateful to all members of RENFORCE (Utrecht Centre for Regulation and Enforcement in Europe – Universiteit Utrecht) for the valuable input received along the way of writing this article. I am grateful to Charlotte Bille-Hasselstrøm (University of Southern Denmark) for the editorial assistance. The views expressed in this article represent the Author’s opinion only and do not reflect those of the Institution(s) he works for.Ca’ Foscari University of VeniceVeniceItaly

European Company and Financial Law Review, 2018, vol. 15, issue 4, 772-804

Abstract: Over the last ten years the architecture of financial regulation and supervision in Europe has undergone sweeping changes. The demise of the previous “laissez faire era” unleashed an extraordinary torrent of EU institutional and regulatory reforms. Approaches, methodologies and tools by which financial institutions are regulated have drastically been revised to cope with the increasing complexity of modern financial intermediation. New forms of collaborative and polycentric governance in fact emerged as to better respond to sophisticated market failures, opening up to amplified participation and power-sharing between “public” and “private” actors. Crisis management and bank resolution represent an interesting area where regulators reserved some room for a public-private collaborative form of regulation. While there is some extensive scholarship placing recovery and resolution planning at the intersection of ex ante and ex post regulatory strategies, little attention has been paid to the specific modes of interaction between regulators and regulated entities. This study aims to advance knowledge by assessing the main features of “living wills” regulation in the light of the “new governance” theory. In so doing, it emphasizes the advantages of a dynamic cooperation between public (governments, regulators) and private (regulated) parties in overcoming looming market failures such as informational asymmetries and moral hazard.

Date: 2018
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DOI: 10.1515/ecfr-2018-0024

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