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Is there a "retail challenge" to banks' resolvability? What do we know about the holders of bail-inable securities in the Banking Union?

Author

Listed:
  • Farina, Tatiana
  • Krahnen, Jan Pieter
  • Mecatti, Irene
  • Pelizzon, Loriana
  • Schlegel, Jonas
  • Tröger, Tobias

Abstract

To ensure the credibility of market discipline induced by bail-in, neither retail investors nor peer banks should appear prominently among the investor base of banks' loss absorbing capital. Empirical evidence on bank-level data provided by the German Federal Financial Supervisory Authority raises a few red flags. Our list of policy recommendations encompasses disclosure policy, data sharing among supervisors, information transparency on holdings of bail-inable debt for all stakeholders, threshold values, and a well-defined upper limit for any bail-in activity. This document was provided by the Economic Governance Support Unit at the request of the ECON Committee.

Suggested Citation

  • Farina, Tatiana & Krahnen, Jan Pieter & Mecatti, Irene & Pelizzon, Loriana & Schlegel, Jonas & Tröger, Tobias, 2022. "Is there a "retail challenge" to banks' resolvability? What do we know about the holders of bail-inable securities in the Banking Union?," SAFE White Paper Series 92, Leibniz Institute for Financial Research SAFE.
    • Handle: RePEc:zbw:safewh:92
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    References listed on IDEAS

    as
    1. Claudia Pigrum & Thomas Reininger & Caroline Stern, 2016. "Bail-in: who invests in noncovered debt securities issued by euro area banks?," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 32, pages 101-119.
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    More about this item

    Keywords

    Banking Union; Bailin; Retail Challenge;
    All these keywords.

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