Write-down and Conversion of Capital Instruments

This chapter analyzes the relationship between burden-sharing arrangements and fundamental rights. Particular attention is paid to the question whether the application of a bail-in constitutes a breach of the right to property (see some judgments of the Court of Justice of the European Union). This contribution also focuses on the disproportionate effects of the regime. The BRRD does not provide for different treatment of eligible liabilities based on the nature of the holder. In many cases, the initial sale of banks’ debt liabilities to retail investors and disclosure practices has not been applied in line with consumer protection requirements, resulting in the emergence of a number of mis-selling cases. This issue has been the object of a statement of the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA), according to which, the resolution authorities should balance general and private interests.