The European Commission recently announced an extensive package of banking reform proposals. Of particular interest to bank creditors, proposed amendments to the Bank Recovery and Resolution Directive aim to amend the creditor hierarchy in European bank resolution and insolvency proceedings. The Commission is also proposing changes to the onerous requirement that banks procure third party agreements to the recognition of bail-in for contracts governed by the laws of a third country. The timing of these proposals is significant because in both areas national rulemakers in different EU Member States are currently implementing, or planning to implement, differing requirements. This note discusses the Commission’s proposals in the context of the bail-in tool with a particular focus on the implications for creditors.

View full memo, Implications for Bank Creditors: the Latest EU Banking Reform Proposals