Limits of resolution tools under the BRRD and the Czech act on recovery procedures and the financial market crisis resolution
Limits of resolution tools under the BRRD and the Czech act on recovery procedures and the financial market crisis resolution

Summary/Abstract: Given the unique position of credit institutions and their systemic importance for the financial stability, their resolution has been traditionally entrusted to supervisory authorities rather than courts. As a result, credit institutions are essentially excluded from the scope of “traditional” insolvency procedure and fall under the resolution regime constituting specific form of administrative proceedings. Directive 2014/59/EU of the European Parliament and of the Council (known as the BRRD) is of a particular consequence here as it harmonized the resolution process at the level of the European Union and the European Economic Area, inter alia through the implementation of specific resolution tools. This article deals with conditions for applicability of such resolution tools, their fundamental mechanics as well as legal implications arising thereunder, considering also the Act on Recovery Procedures and the Financial Market Crisis Resolution under which the BRRD has been implemented into Czech law.

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