Background
The Recovery and Resolution Directive, the legislative
cornerstone of the EU's response to the problem of 'too big
to fail' banks, has been passed by lawmakers in the European
Parliament. The legislation paves the way for European Union
countries to create a consistent set of national laws to implement
the Financial Stability Board's 'Key Attributes of
Effective Resolution Regimes for Financial Institutions',
including the power to 'bail-in' bank creditors.
But there is still a long way to go to make systemically
important banks resolvable. This paper highlights key areas of
focus for senior management as they look to embed resolution
planning into their business-as-usual practices, including
integrating the effect of bail-in resolution strategies, enhancing
data capabilities (particularly for the purpose of performing
valuations), ensuring operational continuity, and making the right
links with other regulatory requirements.
