BBA has published a briefing paper setting out its position on the Commission’s proposal for a bank recovery and resolution directive. It suggests that certain powers, such as appointing a Special Manager or requiring a plan for debt restructuring, are more akin to resolution tools and should not be used until the firm has reached its point of non-viability. This also applies to the bail-in tool, which cannot be used as the first or default option. Each competent resolution authority should maintain a code of conduct identifying the circumstances that trigger the use of the different resolution tools. BBA also expresses concerns about how the exclusion of short-term liabilities from the scope of the bail-in could incentivise a move towards short-term funding. Finally, commenting on the need to establish resolution funds, BBA does not agree with creating an obligation for Member States’ respective funds to assist each other. It concludes that it cannot support some aspects of the proposal, including the proposals for funding. (Source:BBA Briefing on Recovery and Resolution Directive)