Alternative Investment Management Association Representing the global hedge fund industry
On 6 June 2012, the European Commission released its proposal for a ‘Directive establishing a framework for the recovery and resolution of credit institutions and investment firms’ (BRRD).
The BRRD was proposed in order to help meet the EU’s G20 and FSB commitments on the recovery and resolution of systemically important financial institutions and provides for a harmonised system of rules across the EU intended to deal with the distress and failure of credit institutions and large investment firms within the EU in order to minimise consequences for the broader financial system and remove the moral hazard of taxpayer funded bail-outs.
The BRRD proposal can be separated into three categories:
The European Parliament ECON Committee and Council of the European Union adopted their respective final positions on the Level 1 BRRD text in May and June 2013. Inter-institutional Trialogues then commenced, with a political agreement being reached on 11 December 2013.
The politically agreed level 1 text was formally adopted by the European Parliament on 15 April 2014 and by the Council on 6 May 2014.
The BRRD was published in the Official Journal of the European Union on 12 June 2014. It will enter into effect on 1 January 2015.
Key legislative documents
Draft Regulatory Technical Standards on the content of recovery plans under the draft Directive establishing a framework for the recovery and resolution of credit institutions and investment firms (March 2013)
Summary of Final Policial Agreement for BRRD (February 2014)
Response to EC crisis management consultation (March 2011)
EU Press Release on Political Agreement for BRRD (December 2013)
ECB Opinion on Commission Proposal for the RRD (November 2012)
EC Communication on Bank Resolution Funds (May 2010)