Non-preferred senior debt analysed

Author: | Published: 29 May 2018

The EU has created a new rank of bank creditors to help banks comply with the resolution requirements at a more favourable cost while improving the protection of depositors

In its conclusions of June 17 2016, the European Council invited the Commission to put forward a proposal on a common approach to the bank creditors' hierarchy to enhance legal certainty in the event of resolution. This invitation was promptly followed by an initiative from the Commission, which eventually resulted in the adoption of a December 12 2017 directive amending a 2014 counterpart regarding the ranking of unsecured debt instruments in the insolvency hierarchy (the so-called NPS directive, to refer to the fact that its main purpose is to create the new category of non-preferred senior debt)....