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    BaFin Consults on Revisions to Requirements for Implementing Bail-In

    November 17, 2020

    BaFin launched a consultation (16/2020) on revisions to the circular on the minimum requirements for the feasibility of a bail-in. BaFin had published the original circular on the minimum requirements for the feasibility of a bail-in on July 04, 2019. The planned new version of the circular is aimed at all institutions under the direct responsibility of BaFin as the national resolution authority, for which no insolvency scenario has been defined as a resolution strategy. The consultation closes on December 16, 2020.

    The draft version contains requirements for the management information systems of the concerned institutions. The requirements are intended to ensure provision of the information necessary for an effective and efficient implementation of the resolution instruments, for the participation of the holders of relevant capital instruments; creditor participation in accordance with Sections 89 and 90 of the Reorganization and Resolution Act is essential. The revised version of the circular also includes requirements for the technical and organizational equipment to ensure that the information can be provided within 24 hours of being requested by the resolution authority. Minimum requirements for the feasibility of a bail-in are also to be expanded in certain other areas. The main extensions relate to additional data points for the further development of the external bail-in implementation, the extension to all bail-in-capable liabilities (taking into account the principle of proportionality), and the inclusion of a catalog of frequently asked questions. 

     

    Related Links (in German)

    Comment Due Date: December 16, 2020

    Keywords: Europe, Germany, Banking, Bail-In, Resolution Planning, Resolution Framework, BaFin

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