What is Banking Resolution?

What is Banking Resolution?

In the previous video, Gilles outlined recovery, i.e. the stage where a bank is still a going concern and attempts to bring itself back to health. In this video he explains the next stage if recovery fails, resolution.
Overview

New rules implemented following the financial crisis of 2008 laid out standardised tools and powers for national authorities to deal with failing banks, with the intention of minimising the negative impact of bank failures on taxpayers, without jeopardising the financial system as a whole. The first stage is Recovery, with the intention of bringing a failing bank back to health, if this doesn’t work, the next stage is Resolution.

Resolution is where a bank is failing or likely to fail and there is no prospect of recovery. In this scenario, the resolution authority will, if it is in the public interest, step in and take control of the bank in a safe and controlled manner with the intention of protecting financial stability.

Key learning objectives:

  • Understand the Resolution stage of Recovery and Resolution

  • Identify some real-world examples of Recovery and Resolution being implemented

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Summary
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Expert
Gilles Renaudiere

Gilles Renaudiere

Gilles Renaudiere is a corporate adviser in BNP Paribas' Capital Products team, focusing on financial institutions and capital markets. His role is to advise banks and insurance companies on their optimal capital structure and prudential regulatory matters. He also advises them on instruments they issue such as hybrid instruments and TLAC and MREL debt. Prior to this he spent 8 years at UBS, where he worked in the capital Solutions and Debt Capital markets teams.

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