World Bank Guidebook to the BRRD: Understanding Bank Recovery and Resolution in the EU

28 Nov World Bank Guidebook to the BRRD: Understanding Bank Recovery and Resolution in the EU

The 2007 financial crisis has exposed major weaknesses in global financial systems, including the threat to financial stability posed by banks that were too big, interconnected and complex to be closed or go bankrupt. As a result, many banks have been rescued using public support, effectively shifting (most) of their losses to taxpayers instead of banks’ owners or investors. The Bank Recovery and Resolution Directive (BRRD) represents the European Union’s political and regulatory response – a game-changing legal framework to reduce both the likelihood and the impact of failure. It has wide reaching implications, both within the EU but also for countries with banking relationships with the EU.

The World Bank Guidebook to the BRRD aims to explain the scope, the principles, and the rationale of the BRRD and related secondary legislation and guidance. Expert contributors, including lawyers, practitioners and academics, share in this Guidebook their experience of and insights to the BRRD negotiation process, recovery and resolution planning, adoption of resolution decisions and the negotiation of bail-in. The Guidebook also raises awareness of discretionary or non-regulated areas and provides some initial thoughts for further development and possible implementation challenges.

The Guidebook was published by the World Bank Financial Sector Advisory Center (FinSAC), based in Vienna, and is available, free of charge, from the World Bank website. CEPA senior expert Christian M. Stiefmueller is one of the contributing authors of this Guidebook.