...EU Is Path 3: Most banks in the EU, with the exception of large banks in Sweden, are on path 3, as set out in Fitch Ratings report Sovereign Support for Banks Rating Path Expectations. Continuing progress on the Bank Recovery and Resolution Directive (BRRD) and in Banking Union countries the Single Resolution Mechanism (SRM) are likely to mean that full support for senior creditors in most EU banks that fail, while possible, can no longer be relied on. However, there are some EU banks on paths 1 or 2. Support Remains for Some: A small group of EU banks on paths 1 or 2 will retain state support in their ratings due to some form of state sponsorship. This report sets out the forms of state sponsorship that Fitch considers should continue to be factored into EU banks Support Ratings, Support Rating Floors (SRFs) and, where relevant, Issuer Default Ratings (IDRs). Most of the EU banks that will retain support in their ratings are in Germany and are covered in our report Various Support Rating...
