Bail-In and Total Loss-Absorbing Capacity(TLAC)

As opposed to a bank bailout, a bail-in occurs when creditors are forced to bear some of the burden of bank failure. The principal aim of this restructuring tool is to eliminate some of the risk for taxpayers. Several jurisdictions, including Switzerland and the European Union (EU), have adopted legal provisions regarding the bail-in, but until this, book literature on its implementation has been scarce. Offering a detailed and comparative analysis of EU and Swiss law relating to bail-ins and their economic impact, this is the first book to provide in-depth coverage of this new method of dealing with the failure of systemically important banks.

In its contextualisation and analysis of the bail-in resolution tool, the book identifies and discusses the legal and economic issues that arise, including such aspects as the following:

• – the legal and economic properties of bail-in capital;
• ? the regulatory standard on total loss-absorbing capacity (TLAC) issued by the Financial Stability Board (FSB);
• ? the scope and sequence of liabilities subjected to bail-in;
• ? the legal position of stakeholders affected by a bail-in;
• ? strategies and procedures for the implementation of a bail-in;
• ? the limited circumstances under which government rescues should be available; and
• ? cross-jurisdictional issues and aspects of international cooperation.

As well as case studies and analyses of legal issues with particular reference to Swiss law and the European Bank Resolution and Recovery Directive (2014/59/EU), the author applies economic concepts to the analysis of the law. International developments, in particular standards issued by leading regulatory bodies, are also covered. This book will be welcomed by legal practitioners working in banks and in banking regulation and by policymakers seeking information on the practical issues involved. As a detailed analysis of a new and highly significant development in banking law, it will also be of great interest to academics.