The new European bank resolution framework: policy implications on European banks

The change in bank resolution policy in Europe Union generated some implications for the EU banking system. We discuss the bail-in resolution tool introduced within the EuropeanBanking Union project alongside a review of the literature. Moreover, we analyse twoimportant policy implications of the transition from a bailout to bail-in resolution. weobserve the change in the banks’ liabilities composition; second, we examine the reallocationof banks’ bond holdings, according to the point of view of mis-selling. We observe a changein the liability composition towards cheaper liabilities and a reallocation of bank bondstoward more financially sophisticated investors, after the implementation of the bail-in mechanism.