The Cross-Border Effect of the Resolution Measures in the European Union under Directive 2014/59/EU and their Judicial Review


Rashko Stoyanov*


The global financial crisis of 2007 – 2008 has caught the national competent authorities of the Member States unprepared to meet its challenges in a highly integrated internal market for financial services in the EU. In response, the Union’s legislator adopted Directive 2014/59/EU which introduced a legal framework for the resolution of failing credit institutions and investment firms (“institutions”) across the EU.

Directive 2014/59/EU sets out an obligation on the Member States to designate national resolution authorities that are “armed” with a set of resolution tools and empowered to adopt resolution measures in respect of failing institutions established in the territory of their Member State. Given that the rules governing the internal market for financial services in the Union give the institutions, established within its borders, opportunities to provide financial services in all Member States, it is often necessary for national resolution authorities to apply the resolution tools as they exercise their powers in respect of assets located in a Member State other than their own or in respect of rights or obligations governed by the law of such a state.

In this respect, this article examines how Directive 2014/59/EU addresses the matter of the cross-border effect of resolution measures in the EU. Taking into account the fact that the implementation of resolution tools could potentially affect the rights and interests of the shareholders and creditors of an institution under resolution even when they are established in a Member State other than the state of the resolution authority, the article examines the options that Directive 2014/59/EU gives them to protect their rights and interests against the cross‑border effect of resolution measures.

* PhD student at the Institute for Legal Studies at BAS and expert at the Financial Supervision Commission (“FSC”). The opinion expressed in the article is purely personal and does not bind the FSC.