S&P Global Market Intelligence

European Horizons

The Resolution Story For Europe's Banks: More Resolvability, Consistency, Credibility

Key Takeaways

S&P Global Ratings continue to see a clear intent among policymakers to move from bail-out to bail-in resolution, and this continues to inform their base case for European commercial banks.
However, Europe still has plenty to do to complete banks' resolvability and make the prospect of resolution more credible.
European banks' ramp-up of subordinated bail-in buffers will continue to support the ratings, as long as the resolution strategy is likely to avoid a default on all senior preferred liabilities.
S&P Global Ratings expect the ongoing review of the EU's crisis management framework to lead to improved consistency and credibility, but to have little ultimate effect on their European bank ratings.

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