Rossella Locatelli, Cristiana Schena, Elisa Coletti, Fabrizio Dabbene

Management and Costs of Banking Crises After BRRD

  • Abstract

Informations and abstract

Keywords: Bank Recovery and Resolution Directive (BRRD); Single Resolution Mechanism; Banking Crisis; Costs of Bank-Crisis Management.

This paper examines the solutions of bank crises adopted in Italy since the entry into force of the new European framework of crisis management, based on BRRD, the Single Resolution Mechanism and State aid rules. Starting from the analysis of the complex decision process at European level, the paper finds that each bank crisis was solved through different tools, ranging from resolution, orderly liquidation and the precautionary recapitalisation. Consistently with the objectives of the new framework, the bulk of crisis costs was paid by the private sector, especially banks, whose intervention avoided higher costs for savers, the local economy, and, ultimately, the State.

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