Securitisation and Regulation News

EBA Releases Draft Consultations on Guidelines on the Use of Bail-In Power

The European Banking Authority (EBA) lunched two public consultations:

1) Guidelines on the treatment of shareholders when applying the bail-in tool or the write down or conversion of capital instruments; and
2) Guidelines on when and how different conversion rates from debt to equity should be set for different types of liability.

These two sets of Guidelines are part of a series of EBA regulatory mandates under the Bank Recovery and Resolution Directive (BRRD), which aim to ensure that the bail-in power is an effective way of absorbing losses and recapitalizing banks in resolution, and that resolution authorities and other stakeholders have a clear understanding of the terms on which it should be applied. Comments on both Consultation Papers are due by February 6, 2015.

Consultation Papers:
Treatment of Shareholders
Rate of Conversion
Press Release