12.1 What options are available where banks are failing
in your jurisdiction?
The failure of banks is governed by the Law of 5 April 1993 on
the financial sector, as amended ('Banking Act') and the
Law of 18 December 2015 on the resolution, reorganisation and
winding up measures of credit institutions and certain investment
firms and on deposit guarantee and investor compensation schemes
('BRR Law'). The Banking Act contains prudential rules and
obligations in relation to recovery planning, intra-group financial
support and early intervention; the BRR Law covers the resolution
of banks.
Recovery: Credit institutions must draw up and
maintain a recovery plan that provides for measures to be taken by
the credit institution to restore its financial position following
a significant deterioration of its financial situation, which must
be updated at least once a year and is subject to an assessment by
the Commission de Surveillance du Secteur Financier
(CSSF). The
