ROBUSTNESS OF THE BANK RESOLUTION FRAMEWORK IN THE EUROPEAN UNION
The purpose of this article is to identify the key elements of resolution framework under the Single Resolution Mechanism (SRM) and to assess the robustness of the bank resolution framework in the European Union (EU). The 2007–2009 global financial crisis exposed number of weaknesses in the banking...
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| Format: | Article |
| Language: | English |
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Nicolaus Copernicus University in Toruń
2017-06-01
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| Series: | Copernican Journal of Finance & Accounting |
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| Online Access: | https://apcz.umk.pl/CJFA/article/view/13879 |
| _version_ | 1827847635415859200 |
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| author | Jan Pys |
| author_facet | Jan Pys |
| author_sort | Jan Pys |
| collection | DOAJ |
| description | The purpose of this article is to identify the key elements of resolution framework under the Single Resolution Mechanism (SRM) and to assess the robustness of the bank resolution framework in the European Union (EU). The 2007–2009 global financial crisis exposed number of weaknesses in the banking sector. It also showed the unpreparedness of the European governments in dealing with failing banks and the possible negative consequences it can have on the wider economy. As result, in order to save the economy from even deeper crisis, governments in many European countries had no other choice than to bail-out the “too-big-to-fail” banks using taxpayers’ money. Post-crisis, banking regulators recognised the need for a broader reform and creation of a formalized resolution framework which would allow for efficient resolution of troubled banks with no or limited use of public funds. The resolution proceedings are complex procedures, which need to balance the interest of the different bank stakeholders such as: shareholders, debt holders, regulatory and supervisory authorities, governments and many others. In the EU, the SRM was put in place together with Bank Recovery and Resolution Directive (BRRD) to address the issues identified during the crisis. This article is an attempt to demonstrate that the new European resolution framework contains provisions and tools that may limit the use of public funds in resolution of failing banks. The outcome provides a framework for further research focused on better understanding of the trade-offs in resolution framework and measuring the efficiency of bank resolution in the EU. |
| first_indexed | 2024-03-12T09:33:07Z |
| format | Article |
| id | doaj.art-73325ca256be4a2180d9463bf79cd206 |
| institution | Directory Open Access Journal |
| issn | 2300-1240 2300-3065 |
| language | English |
| last_indexed | 2024-03-12T09:33:07Z |
| publishDate | 2017-06-01 |
| publisher | Nicolaus Copernicus University in Toruń |
| record_format | Article |
| series | Copernican Journal of Finance & Accounting |
| spelling | doaj.art-73325ca256be4a2180d9463bf79cd2062023-09-02T13:51:16ZengNicolaus Copernicus University in ToruńCopernican Journal of Finance & Accounting2300-12402300-30652017-06-0161ROBUSTNESS OF THE BANK RESOLUTION FRAMEWORK IN THE EUROPEAN UNIONJan Pys0Cracow University of EconomicsThe purpose of this article is to identify the key elements of resolution framework under the Single Resolution Mechanism (SRM) and to assess the robustness of the bank resolution framework in the European Union (EU). The 2007–2009 global financial crisis exposed number of weaknesses in the banking sector. It also showed the unpreparedness of the European governments in dealing with failing banks and the possible negative consequences it can have on the wider economy. As result, in order to save the economy from even deeper crisis, governments in many European countries had no other choice than to bail-out the “too-big-to-fail” banks using taxpayers’ money. Post-crisis, banking regulators recognised the need for a broader reform and creation of a formalized resolution framework which would allow for efficient resolution of troubled banks with no or limited use of public funds. The resolution proceedings are complex procedures, which need to balance the interest of the different bank stakeholders such as: shareholders, debt holders, regulatory and supervisory authorities, governments and many others. In the EU, the SRM was put in place together with Bank Recovery and Resolution Directive (BRRD) to address the issues identified during the crisis. This article is an attempt to demonstrate that the new European resolution framework contains provisions and tools that may limit the use of public funds in resolution of failing banks. The outcome provides a framework for further research focused on better understanding of the trade-offs in resolution framework and measuring the efficiency of bank resolution in the EU.https://apcz.umk.pl/CJFA/article/view/13879bankfinancial crisesresolutionliquidationfinancial aspects of economic integration |
| spellingShingle | Jan Pys ROBUSTNESS OF THE BANK RESOLUTION FRAMEWORK IN THE EUROPEAN UNION Copernican Journal of Finance & Accounting bank financial crises resolution liquidation financial aspects of economic integration |
| title | ROBUSTNESS OF THE BANK RESOLUTION FRAMEWORK IN THE EUROPEAN UNION |
| title_full | ROBUSTNESS OF THE BANK RESOLUTION FRAMEWORK IN THE EUROPEAN UNION |
| title_fullStr | ROBUSTNESS OF THE BANK RESOLUTION FRAMEWORK IN THE EUROPEAN UNION |
| title_full_unstemmed | ROBUSTNESS OF THE BANK RESOLUTION FRAMEWORK IN THE EUROPEAN UNION |
| title_short | ROBUSTNESS OF THE BANK RESOLUTION FRAMEWORK IN THE EUROPEAN UNION |
| title_sort | robustness of the bank resolution framework in the european union |
| topic | bank financial crises resolution liquidation financial aspects of economic integration |
| url | https://apcz.umk.pl/CJFA/article/view/13879 |
| work_keys_str_mv | AT janpys robustnessofthebankresolutionframeworkintheeuropeanunion |