Second, effective and realistic recovery and resolution plans must be drawn up and maintained by the banks, as proposed in the Commission’s Bank Recovery and Resolution Directive. The resolution authority should request a wider separation than the considered mandatory separation above if this is deemed necessary to ensure resolvability and operational continuity of critical functions. 3.
The use of designated bail-in instruments is strongly supported by the Group. The position of bail-in instruments within the hierarchy of debt commitments in a bank’s balance sheet must be clear so that investors know the eventual treatment in case of resolution. Banks should build up a sufficiently large layer of “bail-inable” debt.