-We need to stay firm that the BRRD shall encourage market discipline and responsible risk behaviour. That is why I consider it crucial that the revision of BRRD, with the introduction of TLAC (Total Loss Absorbing Capacity), does not put into question that all debt is exposed to the risk of bail- in. In that way, all investors as well as owners will know they are taking a calculated risk and all banks will know the importance of keeping the risks under control.
This was the main message of Gunnar Hökmark, MEP, when he presented his views on the revision of the banking crisis legislation, being Parliaments rapporteur for the package of legislative proposals.
-The fact that we now have a lively discussion about the BRRD and how the rules have been followed is proofing that the legislation is not only in place but also the framework for how banks in crisis are to be dealt with. The Commission, ECB, the Italian authorities and the Spanish have had to ensure they are following the new rules. Markets have finally understood that there is a new regime in place, to which they need to adopt. In addition, all actors know that shareowners and investors in banks are running the same risk as in any other business, said Hökmark.