Bank Resolution in Europe: The Unfinished Agenda of Structural Reform

Jeffery N. Gordon; Georg Ringe

Bank Resolution in Europe: The Unfinished Agenda of Structural Reform

Jeffery N. Gordon, Georg Ringe

CBS LAW

Columbia University

Research output: Other contribution › Net publication - Internet publication › Communication

Abstract

Bank resolution is a key pillar of the European Banking Union. This column argues that the current structure of large EU banks is not conducive to an effective and unbiased resolution procedure. The authors would require systemically important banks to reorganise into a ‘holding company’ structure, where the parent company holds unsecured term debt sufficient to cover losses at its operating financial subsidiaries. This would facilitate a ‘single point of entry’ resolution procedure, minimising the risk of creditor runs and destructive ring-fencing by national regulators.

Original language	English
Publication date	28 Jan 2015
Publication status	Published - 28 Jan 2015

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http://www.voxeu.org/article/restructure-eu-banks-facilitate-resolutionLicence: Unspecified

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title = "Bank Resolution in Europe: The Unfinished Agenda of Structural Reform ",

abstract = "Bank resolution is a key pillar of the European Banking Union. This column argues that the current structure of large EU banks is not conducive to an effective and unbiased resolution procedure. The authors would require systemically important banks to reorganise into a {\textquoteleft}holding company{\textquoteright} structure, where the parent company holds unsecured term debt sufficient to cover losses at its operating financial subsidiaries. This would facilitate a {\textquoteleft}single point of entry{\textquoteright} resolution procedure, minimising the risk of creditor runs and destructive ring-fencing by national regulators.",

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AB - Bank resolution is a key pillar of the European Banking Union. This column argues that the current structure of large EU banks is not conducive to an effective and unbiased resolution procedure. The authors would require systemically important banks to reorganise into a ‘holding company’ structure, where the parent company holds unsecured term debt sufficient to cover losses at its operating financial subsidiaries. This would facilitate a ‘single point of entry’ resolution procedure, minimising the risk of creditor runs and destructive ring-fencing by national regulators.

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