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Effective resolution of banks: Problems and solutions

Günter Franke (), Jan Krahnen () and Thomas von Lüpke

No 19, SAFE White Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: This essay reviews a cornerstone of the European Banking Union project, the resolution of systemically important banks. The focus is on the inherent conflict between a possible intervention by resolution authorities, conditional on a crisis situation, and effective prevention prior to a crisis. Moreover, the paper discusses the rules for bail-in debt and conversion rules for different layers of debt. Finally, some organizational requirements to achieve effective resolution results will be analyzed.

Keywords: Bank Recovery and Resolution Directive (BRRD); Single Resolution Mechanism (SRM); Bail-in (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-ban and nep-eec
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