Abstract
Title IV of the Bank Recovery and Resolution Directive (BRRD) concerns resolution. If ‘conditions for resolution’ are met, resolution authorities may place any entity covered by BRRD under resolution, apply the resolution tools, and exercise the resolution powers. ‘Resolution’ is often contrasted with ‘insolvency’. Resolution is a specialized regime for bank failures, and its objectives are fundamentally different from the objectives of normal insolvency law. The resolution regime has general public interest as its main, most abstract goal, whereas the insolvency regime traditionally aims at maximizing creditor value. For these reasons, resolution management is the responsibility of government authorities rather than courts. Nonetheless, insolvency law remains of essential importance to bank resolution rules. Not only will (national) insolvency law remain critical for the interpretation and application of the BRRD’s bank resolution rules such as the ‘No Creditor Worse Off’ rule (see below at paras 7.102–7.104), but insolvency law will also remain applicable to bank failures where specific bank resolution rules do not apply.
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