The European Union is never happier than when it is changing a
sovereign country's laws for it. Normally it limits its role to
changing the laws of the various EU member states. However, when
the EU elected to make mandatory provisions for non-EU foreign law
governed documents in the Bank Resolution and Recovery Directive
(or EU Directive 2014/59 to give it its official title) that
certainly looked like breaking new ground.
The premise behind the Directive is not terribly exciting. For
anyone who hasn't been paying attention for the last five or so
years, various European banks have managed to get themselves into
financial trouble. A number of them have been the subject of state
intervention. More recently (as taxpayers became more and more
stretched) this aid has taken the form of "bail-ins",
which is a nice way of saying forcibly writing off or converting
external debt into equity in the bank.
