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Bank recovery and resolution

The EU provides a framework for authorities to manage bank failures effectively.

What the EU is doing and why

A bank resolution occurs when authorities determine that a failing bank cannot go through normal insolvency proceedings without harming public interest and causing financial instability.

To manage the bank's failure in an orderly manner, authorities use resolution tools that 

  • ensure continuity of the bank's critical functions
  • maintain financial stability
  • restore the viability of parts or all of the bank – or transfer them to another bank

Meanwhile, any part of the bank that cannot be made viable again goes through normal insolvency proceedings.

After the 2007-2009 global financial crisis, the EU adopted a number of measures to harmonise and improve the tools for dealing with bank crises.

Policy making timeline

  1. 18 April 2023
    Legislative proposal - Bank recovery and resolution
  2. 20 May 2020
    Legislation - Bank recovery and resolution
  3. 23 November 2016
    Legislative proposal - Bank recovery and resolution

Relevant legislation