Commission Cracks The Whip On Creditor Hierarchy Harmonisation

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There could be a light at the end of the tunnel for European lenders waiting to issue billions in loss-absorbing debt as rulemakers ramp up the pressure to accelerate the requisite legislation. The European Commission endorsed a new form of senior unsecured debt in November 2016 in an attempt to harmonise the increasingly fragmented European bank debt market, the result of diverging national approaches to meeting post-crisis regulation, Reuters reported. At the time, it provisionally indicated a June 2017 deadline for the amendments to the Bank Recovery and Resolution Directive (BRRD), though whether such a deadline was feasible immediately met with broad scepticism. However, in a working paper from earlier this month seen by IFR, the Commission underlined the need to expedite the adoption of its proposal tackling the harmonisation of the bank creditor hierarchy. It warned that failure by the European Council to fast-track the adoption of the proposal could prompt member states to adopt their own national rules on creditor hierarchy. Read more.