By Scott Morrison (of
counsel) and Stephen Phillips (partner) at Orrick, Herrington
& Sutcliffe's restructuring group in
On February 1
2013 De Nederlandsche Bank (DNB) nationalised SNS Reaal Group.
The Dutch central bank used powers granted to it under the
local implementation of the Bank Recovery and Resolution
Directive (BRRD), the Special Measures for Financial
Corporations Interventions Act.
and subordinated creditors were expropriated without
compensation as a last resort to prevent systematic contagion
throughout the Dutch financial sector.
intervention act provided an important tool to prevent the
collapse of SNS, some crucial aspects of the BRRD were not in
place early enough to prevent the deterioration of SNS, most
importantly a requirement for financial institutions to plan
and prepare for scenarios that could lead to their failure, and
early intervention measures allowing regulators to intervene in
the management of banks.
In the light of the current regulatory...