3 The Bank Recovery and Resolution Directive: An International Standards Perspective

Abstract

This chapter sets some aspects of the new resolution mechanism against the international financial sector standards that have emerged over the past decade. The harmonized resolution framework fostered by the Bank Recovery and Resolution Directive (BRRD) will significantly improve resolution capacity and may be as far as we can go without making amendments. Nevertheless, there are a number of deviations from the best practices identified in the relevant standards. The chapter discusses some of these deviations, such as the likely dominance of national representatives on the Single Resolution Mechanism (SRM) Board and the European Council power to modify and/or turn down a resolution proposed by the Board which may lead to divergences across Member States, and to possible inconsistencies with the Single Supervisory Mechanism (SSM).