Bank recovery and resolution

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Bank recovery and resolution regimes are regulatory frameworks designed to manage failing banks while minimising systemic risk and protecting taxpayers.

Recovery includes preventive measures banks must implement when facing financial stress and plans they must have (living wills) to restore themselves to financial health without government intervention.

Resolution procedures that allow regulators to intervene and manage failing institutions, restructuring them, selling crappy asset, bailing-in institutional creditors. Resolution is aimed at maintaining critical functions and financial stability.

Examples

• Bank Recovery and Resolution Directive (BRRD) (2014)
• United States: Dodd-Frank Act (Title II)
• United Kingdom: Special Resolution Regime (SRR): aligns with BRRD

See also

• Insolvency
• Bankruptcy
• The phase transition of bankruptcy

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