...Resolution Vs. Insolvency: EU Bank Recovery and Resolution Directive (BRRD) rules dictate that a failing (or likely to fail) bank should be liquidated under normal insolvency proceedings, except where the authorities consider that there is a public interest in placing the bank into resolution. But imposing losses on senior debt has proven to be complicated by creditor hierarches (in most EU countries, senior debt and junior deposits still rank equally) and fears of contagion risk. In the summer, the resolution of Banco Popular Espanol S.A. did not result in losses for senior creditors as the bail-in of junior creditors was deemed sufficient, while the provision of "liquidation aid" resulted in the same outcome for senior creditors of two smaller Italian banks (Banca Popolare di Vicenza and Veneto Banca S.p.A.). MREL and TLAC Transition: Over the next three years, EU banks' capital structures will transition to meeting the EU minimum requirement for own funds and eligible liabilities" (MREL)...
