The European regulatory framework envisages a variety of tools to help failing banks restructure or exit from the market without interrupting the provision of critical functions and jeopardizing the overall stability of the financial system.
The primary innovation is the bail-in procedure, which requires shareholders and creditors to directly bear the losses incurred by banks in difficulty and to shoulder the burden of recapitalizing them. This tool, which is entirely new for Italy, was requested specifically by those EU countries that had to intervene heavily to support their banking systems during the recent global crisis.