How to address the failure of EU bank resolution rules

Author: Amélie Labbé | Published: 6 Nov 2018

European bank resolution and recovery rules are at risk of being manipulated, but more emphasis on enforcement could help make the framework more consistent and efficient.

These comments from an expert on EU regulation come days after German MEP Phillippe Lamberts told delegates at the recent Single Resolution Board (SRB) conference the framework in place to save banks for collapsing was 'gameable’.

While his words referred specifically to Italy’s Banca Popolare di Vicenza in 2017, which was recapitalised alongside Veneto Banca by the country’s government to the tune of up to €17 billion ($19.4 billion approximately), they have a wider significance too.

Saving the bank’s bondholders was deemed in the national interest because the local economy would have suffered if the lenders were left to collapse – critics have insisted that this interpretation alters the aim and the purpose of the EU’s Banking Recovery and Resolution Directive...