Abstract
The European Commission’s draft Directive on Bank Recovery and Resolution includes a framework for intra-group financial assistance in financial groups. This paper examines the nature of banking groups and the policy arguments for and against a regulated framework for intra-group support. Further, the article explains the procedure itself and outlines issues which may arise in its practical application. Finally, the article studies the relationship between intra-group financial assistance and bank supervision, capital and liquidity requirements and structural ring-fence of retail banking. The article concludes that even if group support is regulated at EU level, divergences in supervision and prudential regulation which can occur under the proposed “single rulebook”, may pose obstacles to group support at cross-border level.
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