Plans for the EU to establish clear rules on the order in which troubled banks’ creditors must cover losses will be debated and voted on Thursday.
The plan is to incorporate in EU law the international standard for total loss absorbing capacity (TLAC) of systematically important banks.
The TLAC requires globally important banks to set aside enough funds to absorb losses and recapitalise with minimum impact on taxpayers.
A credible bail-in “hierarchy” of shareholders and creditors to whom losses are allocated, harmonised across the EU member states, would help to protect critical bank functions and financial stability without taxpayers chipping in, says the text.
Procedure: Co-decision (Ordinary Legislative Procedure), 1st reading agreement
Debate: Thursday, 30 December
Vote: Thursday, 30 December