7 Third Country Relations in the Directive Establishing a Framework for the Recovery and Resolution of Credit Institutions

Abstract

This chapter discusses how the introduction of the Directive for the recovery and resolution of credit institutions through the EU Bank Recovery and Resolution Directive (BRRD) affects third country relations. It argues that effective resolution of internationally active institutions requires cooperation between the Union, Member States, and third country resolution authorities. The BRRD establishes that the objectives of resolution authorities are to ensure the continuity of critical functions; to avoid significant adverse effects on Financial stability, including to prevent contagion and to protect insured depositors and client relations, while minimizing the public and private costs of resolution. Cooperation with third country resolution authorities will be facilitated if their resolution regimes are also consistent with those principles; hence, the importance of international coordination.