BRRD: French regulator ACPR publishes guidance on the operational implementation of the bail-in tool

23 janvier 2024 Publications

Written by Bena Mara and Paul Perney

Published on European Financial Institutions Blog 

Considered the preferred resolution strategy by several banking groups, the bail-in instrument is often presented as the most effective method of maintaining banks’ critical functions and containing systemic risk.

While it has been a regulated tool since the introduction of the Banking Recovery and Resolution Directive (BRRD)[1], the revision of the “banking package” in 2019 has had numerous impacts on the scope and regime of the bail-in instrument, mainly governed by Regulation (EU) 2019/876 amending the Capital Requirements Resolution (CRR2)[2] and Directive (EU) 2019/879 amending the BRRD (BRRD2)[3].

In the wake of this revision, the French banking authority (Autorité de Contrôle Prudentiel et de Résolution or ACPR) has published a document [DL1] [BM2] available to all stakeholders[4] setting out its approach to the operational implementation of the bail-in instrument[5], in line with the European Banking Authority’s (EBA) guidelines[6] published on March 5, 2023.

Pour mémoire, within a resolution banking group, the bail-in instrument applies only to the entity defined as the resolution entity. In the context of a single point of entry resolution strategy, this corresponds to the head of the banking group or, in mutual groups, to the central body and other institutions permanently affiliated with it. Read more