Bail-In from an Insolvency Law Perspective

Abstract

The BRRD and the SRM Regulation established a bank resolution framework that interacts with rather than replaces more general rules of national insolvency law. Policy and academic discussions recognise a need for further alignment of national insolvency laws across the EU with the existing bank resolution framework but at the same time doubts exist whether a full-fledged harmonisation of insolvency law is feasible. Using the legal theory of coherence in a legal system, this article analyses to what extent the bail-in rules are already aligned with and how they are embedded into more general areas of Dutch private law, in particular insolvency law. It shows that with regard to specific aspects of the interaction between the bail-in rules and Dutch private law amendment or clarification is needed to avoid uncertainties about the application of bail-in and related safeguards for shareholders and creditors. These observations might be valid for other EU Member States as well.