Changes in the bank resolution policy in the European Union (EU) induced some changes for the EU banking system. We discuss two main implications of the implementation of the bail-in resolu- tion tool. First, we observe a general shift in the banks’ liability structure toward less expensive sources of funding (e.g., customer deposits). We also examine the reallocation of banks’ bond hold- ings across different investors. Mis-selling of risky bank bonds was common prior to the approval of the new resolution regulation. However, after the implementation of the bail-in mechanism, bank bonds have been reallocated more towards sophisticated financial intermediaries.
The Effects of the New European Bank Resolution Framework
Giulia Scardozzi;
2023-01-01
Abstract
Changes in the bank resolution policy in the European Union (EU) induced some changes for the EU banking system. We discuss two main implications of the implementation of the bail-in resolu- tion tool. First, we observe a general shift in the banks’ liability structure toward less expensive sources of funding (e.g., customer deposits). We also examine the reallocation of banks’ bond hold- ings across different investors. Mis-selling of risky bank bonds was common prior to the approval of the new resolution regulation. However, after the implementation of the bail-in mechanism, bank bonds have been reallocated more towards sophisticated financial intermediaries.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
