Ranking of Unsecured Debt in Insolvency

Summary

This proposal amends EU rules to change how different types of bank debt are prioritized during insolvency, aiming to protect taxpayers and ensure financial stability.
10 27.12.2017
Other
finance
economy
business and competition

Key points

  • Harmonization of insolvency rules for bank debt across all European Union Member States.
  • Introduction of a new asset class known as 'non-preferred senior debt' to help banks meet loss-absorption requirements.
  • New debt instruments must have a maturity of at least one year and contain no embedded derivatives.
  • Ensuring that ordinary unsecured claims maintain a higher priority ranking than this new non-preferred class of debt.
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