A ruling of the European Court on this case is expected early next week. The court ruling may have serious ramifications for the efforts under way to establish an effective Banking Union in Europe. Considerable momentum has developed in favor of bail-in centered banking resolution.
As Andrew Gracie of the Bank of England has noted in a recent speech, a bail-in transaction is at the heart of all the resolution plans drawn up in the Crisis Management Groups. In addition, the European Banking Authority (EBA) has set standards on Minimum Requirement for Own Funds and Eligible Liabilities (MREL) that banks should have to ensure adequate loss absorbing capacity.