Alternative Investment Management Association
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’ (RRD).
The RRD proposal has been developed in order to fulfil the EU’s G20 and FSB commitments on the recovery and resolution of large financial institutions and groups, and provides for a harmonised system of European rules which are intended to deal with the distress and failure of such institutions within the EU in order to minimise systemic consequences and avoid recourse to extraordinary public support.
The RRD proposal can be separated into three categories:
The text of the RRD proposal is currently being negotiated within the European Parliament and Council of the European Union. The institutions are to approve amended versions of the text to form the basis of their positions during inter-institutional ‘trialogue’ negotiations. The European Parliament ECON Committee adopted its final compromise text on 20 May 2013, which now will be referred to a European Parliament plenary vote. The Council has yet to reach a finalised position or 'General Approach'.
The European Banking Authority issued a preparatory Level 2 consultation on the RRD which deals with the content of recovery planning at institution and group level.
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)
Response to EC crisis management consultation (March 2011)
ECB Opinion on Commission Proposal for the RRD (November 2012)
EC Communication on Bank Resolution Funds (May 2010)
On 5 October 2012, the European Commission released a consultation on a possible framework for the resolution of non-bank financial institutions. The Consultation builds upon the G20 mandate and FSB Key Attributes which provide for effective recovery and resolution regimes for all financial institutions. It considers, in particular, the risks and resolution challenges posed by FMI's and insurance companies. AIMA submitted a response.