On December 11, the European Parliament and EU Member
States agreed on the long awaited Bank Recovery and Resolution
Directive (RRD).
The RRD is considered as one of the major steps in developing
Banking Union and the Single Resolution Mechanism. It is dedicated
to prevent new costs for tax payers and to restore confidence in
the European financial sector by ensuring that failing banks can be
reorganized in a predictable and efficient way with minimum
recourse to public money.
Cornerstone and main legal instrument of the RRD, the bail-in
(debt write down) tool applying at the point of non-viability of a
bank will enable resolution authorities to impose the write down or
conversion into equity of the claims of the shareholders and
creditors of institutions which are failing or likely to fail. In
this regard, certain debts will be entirely excluded such as
insured deposits (up to EUR 100,000) as well as liabilities with an
original maturity of less than one month (in
