Obstacles are the way: Progress and regulatory challenges to improve banks’ resolvability

The paper analyses the European legal framework to address impediments to resolvability, highlighting similarities and differences with respect to the UK and US experiences. The main conclusion of the paper is that significant steps have been taken to improve the effectiveness and credibility of the resolution assessment, but these rules might not be enough to ensure the orderly resolution of banks. This is mainly due to the inability of the European public backstop to cope with a liquidity crisis of a large systemic bank, and the lack of harmonization of corporate and bankruptcy law rules on groups.