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Banking fragility rooted in justice failures Evidence from Ukraine
CEPS Project

The provision of critical functions at global, national or regional level – Is there a need for further legal/regulatory clarification if liquidation is the default option for failing banks?

Unit Involved

Financial Markets and Institutions

01 November 2017 / 31 December 2017

This paper defined critical banking functions and considers whether there is a need for further legal/regulatory clarification if liquidation is the default option for failing banks. It relied on EU law and soft law principles (FSB) bearing in mind that ‘liquidation’ is at times a loosely defined concept. Despite efforts to agree upon a set of qualitative and quantitative criteria to assess the critical nature, or lack thereof, of relevant functions, it argues that simplification is needed. Given the discretionary element in the determination of public interest and critical functions and the existence of different legal sources with different purposes, it recommends a consistent application of the resolution rules to build up credibility in the Banking Union project, considering in particular the differential treatment by the competent resolution authorities in recent Spanish and Italian liquidation and resolution cases.

CEPS Project

Project Details

Financial Markets and Institutions


The provision of critical functions at global, national or regional level – Is there a need for further legal/regulatory clarification if liquidation is the default option for failing banks?

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European Parliaments, DG Internal Policies of the Union

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Willem Pieter De Groen Willem Pieter De Groen
Willem Pieter De Groen
+32 (0)2 229 39 57

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