The European Parliament and the European Council have issued a Directive on the Restructuring and Resolution of Entities with the aim of solving problems of unreliability and impracticality.
The financial crisis has revealed the lack of appropriate instruments in the European Union to effectively deal with the problems of soundness or the risk of non-viability of credit institutions and investment services firms.
Directive 2014/59 / EU of the European Parliament and of the Council of 15 May 2014 establishes standards and uniform procedures for the resolution of credit institutions in participating Member States.
The aim of this policy is to ensure that:
- Financial institutions and national competent authorities (NCAs) are prepared to face future crises.
- NCAs have the necessary tools to perform their duties early intervention.
- NCAs have the resolution tools and skills necessary to address situations of financial non-viability.
- Authorities cooperate with each other. Entities contribute to maintaining these measures through contributions made to the Single Resolution Fund (SRF).
The BRRD offers resolution authorities broad powers to intervene, in the public interest, non-viable entities.
The document includes an executive summary and key aspects of the BRRD
The BRRD is a single set of uniform standards and procedures
for the resolution of credit institutions in the European Union.
Scope of application
- Entities established in the European Union.
- Financial institutions established in the Union, subsidiaries of a credit institution or investment services company, or a company referred to in the following points, which are governed by the consolidated supervision of the parent company.
- Financial holding companies, mixed financial holding companies and mixed-activity holding companies established in the Union.
- Parent financial holding companies in a Member State, EU parent financial holding companies, parent mixed financial holding companies in a Member State and EU parent mixed financial holding companies.
- Branches of entities established or located outside the European Union.
Download the technical note by clicking here (only in Spanish).