CLLS responds on bail-in: CLLS' financial and insolvency law committees have responded to Treasury's consultation on the implementation of bail-in powers. CLLS feels it would have been better for the Financial Services (Banking Reform) Act 2013 and relevant secondary legislation to have been promulgated only once the EU Bank Recovery and Resolution Directive (BRRD) was final. However, it appears the UK Government does not want to wait until January 2016 to apply bail-in requirements and so is proceeding ahead of the EU timetable. It cautions on avoiding multiple legislation if possible, and ensuring that there is no regulatory arbitrage between the UK and other EU states that could disadvantage UK banks. It makes several detailed comments on key issues such as:

  • creditor hierarchy;
  • preferential creditors;
  • netting, set-off and protected arrangements; and
  • valuation, bail-ins and compensation.

It also notes concerns on how provisions on banking group companies will apply to securitisation structures. It says a separate submission will address these. (Source: CLLS Responds on Bail-Ins)