This, in turn, can have destabilising effects, by amplifying the incentives for a bank run at the earliest sign of distress.
It is worth recalling that, in this regard, the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) recently published a joint statement encouraging institutions, market and resolution authorities to properly consider retail holders of debt financial instruments subject to the BRRD when carrying out their respective tasks.4 We still need to evaluate its implementation.