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Is the Bank-Sovereign Link Truly Severed? Bruges European Economic Policy Briefings 43/2016

Nicolaides, Phedon and O’Connor, Tony (2016) Is the Bank-Sovereign Link Truly Severed? Bruges European Economic Policy Briefings 43/2016. [Policy Paper]

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    Abstract

    This paper examines the degree to which the Banking Recovery and Resolution Directive and the Single Resolution Mechanism Regulation have severed the dependence of banks on sovereigns. We review the cases in which public aid has been granted to banks since the entry into force of the above legislation, as well as outlining the circumstances in which state shareholdings have been bailed-in. We conclude that the current rules on public assistance to banks need revision as they neglect the fact that for some banks the state is already a shareholder. To remedy this, we propose a revision of the Banking Recovery and Resolution Directive and the Single Resolution Mechanism Regulation whereby private shareholdings are bailed-in before public shareholdings, and where contributions by the national resolution funds or the Single Resolution fund are exhausted before state aid is granted.

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    Item Type: Policy Paper
    Uncontrolled Keywords: Banking resolution, European Union, state aid
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > banks/financial markets
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > College of Europe (Brugge) > Bruges European Economic Policy Briefings (BEEP)
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 17 May 2019 20:09
    Number of Pages: 24
    Last Modified: 17 May 2019 20:09
    URI: http://aei.pitt.edu/id/eprint/97329

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