Home Banking issues Risk management Bank Recovery and Resolution Directive (BRRD): proposed legislation to reform the hierarchy of bank creditors will strengthen banking system stability and improve depositor protection  
 
 
 

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29 december 2015

Bank Recovery and Resolution Directive (BRRD): proposed legislation to reform the hierarchy of bank creditors will strengthen banking system stability and improve depositor protection

 

French government authorities have announced their intention to legislate changes to the hierarchy of bank creditors in the event of financial difficulty.


The measure is in line with the implementation of the Bank Recovery and Resolution Directive (BRRD), enacted in French law by decree in August 2015.


The French Banking Federation welcomes the proposed legislation. By opting to rule out any retroactive effect by the measure, the French government is addressing the concerns of current investors.


The Directive requires banks to demonstrate that they have the necessary resources to continue executing activities essential to financial stability. Furthermore, public resolution funds are established through banks' contributions. These funds can be used if internal resources prove insufficient, removing all possibility of using public financing or customer deposits.

 
 
 
 
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