Recovery and resolution of banks

This chapter focuses on the bank recovery and resolution regime adopted in the post-GFC era. It introduces the concept and international standards of the general regimes of recovery and resolution, examines national legislation and further investigates specific resolution powers and resolution tools. All home and key host jurisdictions to Global Systemically Important Banks are compared, i.e. Canada, China, EU Member States, Japan, Switzerland, the United Kingdom, the Unite States, as well as Hong Kong and Singapore. This chapter finds that all the resolution authorities are empowered to directly intervene in the operations and businesses of a bank in distress and can take administrative actions without the consent of shareholders or creditors. However, differences exist in national frameworks such as types of resolution authorities, coverage of banks, resolution triggers and specific implementation rules for resolution tools and resolution powers. It further stresses the importance to identify the differences of various jurisdictions for mutual understanding and further improvements.