The short deadline of one weekend will hardly be sufficient for a restructuring or resolution to be initiated at a large bank in a way that does not place an excessive strain on the system as a whole.
For this reason, a check should be carried out on the extent to which the legal framework needs to be altered in order to arrive at more efficient decision-making structures in the resolution mechanism. The second problematic point is the authorities’ relatively broad scope for discretion, which allows them to exclude private creditors from loss-sharing. This assessment is not an easy one to make.