Bank Recovery and Resolution Directive (BRRD)—essentials
Bank Recovery and Resolution Directive (BRRD)—essentials

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Bank Recovery and Resolution Directive (BRRD)—essentials
  • Background to the BRRD
  • BRRD—key elements
  • BRRD—scope, definitions and authorities
  • BRRD—resolution colleges
  • BRRD—preparative and early intervention measures
  • BRRD—recovery plans
  • Early intervention
  • BRRD—resolution and resolution plans
  • BRRD—resolution tools
  • More...

Background to the BRRD

This Practice Note summarises the core provisions included in the Bank Recovery and Resolution Directive 2014/59/EU (BRRD). The BRRD proposed a minimum harmonisation framework for dealing with failing credit institutions in the EU.

As a result of the financial crisis, a number of shortcomings were identified in the way public authorities responded to failing banks. Whilst the substantial injection of public money prevented a major bank failure in the EU, it resulted in considerable strains on public finances and with taxpayer funded bail-outs. The BRRD came into force on 2 July 2014 and was born out of the need to ensure that in the future, authorities will be equipped with the necessary instruments to make a decisive intervention at a very early stage before the bank starts to fail. A credible and comprehensive recovery and resolution framework is critical not only to prevent future financial crises and cross-border contagion, but also to ensure long term stability of the financial system.

The BRRD implements the work of the Financial Stability Board (FSB) on effective resolution regimes for international financial institutions in the EU. For further information on the FSB's work please see Practice Note: Financial Stability Board—effective resolution regimes and policies.

The deadline for Member States to adopt and publish the necessary implementing laws, regulations and administrative provisions was 31 December 2014. From 1 January

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