European and Best Practice Bank Resolution Mechanisms : An Assessment and Recommendations for Policy and Legal Reforms
The process of bank resolution, or the procedure for handling insolvency of banks using a range of tools, including alternatives to standard bankruptcy processes, has gained major traction since the experience of the 2008-09 financial crisis. In th...
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| Format: | Other Financial Sector Study |
| Language: | English en_US |
| Published: |
Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2012/03/16422290/european-best-practice-bank-resolution-mechanisms-assessment-recommendations-policy-legal-reforms http://hdl.handle.net/10986/12817 |
| Summary: | The process of bank resolution, or the
procedure for handling insolvency of banks using a range of
tools, including alternatives to standard bankruptcy
processes, has gained major traction since the experience of
the 2008-09 financial crisis. In this context, this report
reviews models for bank resolution that provide increased
flexibility and describes several of the supervisory, legal
and instrumental tools that can be used under modernized
bank resolution procedures. As well, it looks at the recent
European Commission proposals on this matter which take into
account international best practices experiences. It also
highlights areas of reform and areas where further
regulatory considerations and priorities should be
considered. The report reviews the bank resolution regimes
of a group of European countries as well as those of two
non-EU countries to highlight advantages as well as gaps in
the legal and regulatory frameworks. This report surveys the
banking and deposit insurance laws of six European countries
: Poland, the Czech Republic, Germany, Spain, the U.K., and
Croatia. Remedial enforcement measures for distressed banks
and for bank resolution reveals that adoption of the EU
legislative proposals, as described in the EC Communication,
would require significant changes in legislation in four of
the six countries. The report also reviews the laws of
Canada and the U.S. for comparison, as implementation of
their laws has already utilized several of the resolution
instruments and mechanisms being considered. |
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