The New European Union Framework for Banking Crisis Management: Rules versus Discretion

Brescia Morra Concetta
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Brescia Morra Concetta: Professor of EU Financial Law, University of Roma Tre, and vice-chair of the Administrative Board of Review (ABoR) of the Single Supervisory Mechanism of participating EU countries set up by the European Central Bank (ECB). The opinions expressed in this article are solely those of the author and do not represent the official policy or position of the ABoR or of the ECB. I wish to thank the following individuals for their very useful comments: Boudewijn Berger, Danny Busch, Stefano Cappiello, Amélie Champsaur, Raffaele D’Ambrosio, Victor De Serière, Christos Hadjiemmauil, Luis Silva Morais, Marino Perassi, Federico Signorini. I am, of course, solely responsible for any remaining errors.RomaItaly

European Company and Financial Law Review, 2019, vol. 16, issue 3, 349-380

Abstract: What Tolstoy says about families also applies to banks: sound banks are all alike, but every failing bank fails in its own way. This is the reason why broad discretion is needed to manage banking crises. This paper studies the Bank Recovery and Resolution Directive to assess whether it grants the competent authorities enough discretionary powers to deal with banking crises in the most efficient way. The new EU legal framework for banking resolution is marked by a very complex system of rules, with numerous constraints on the discretionary choices of the competent authorities, which could make it difficult to reach the goals underlying the BRRD, i. e., ensuring long term financial and economic stability and reducing the public cost of banking crises.

Date: 2019
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DOI: 10.1515/ecfr-2019-0013

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