Recovery and resolution planning will become mandatory for both financial institutions and authorities. In addition, firm-specific, cross-border cooperation agreements are to be put in place, setting out roles and responsibilities of home and host authorities. The Key Attributes represent quite a step forward. Implementing them will gradually align national resolution regimes, thus ensuring smooth interaction between the different frameworks.
I am hopeful that this will significantly curtail financial institutions’ ability to blackmail the taxpayer. It is now up to governments to transpose the Key Attributes into national law and legislation. In Europe, the draft directive for the restructuring and resolution of credit institutions and securities firms, which was published in June by the EU Commission, is an important step in the right direction.