Latham & Watkins explains US Loan Market Adaptations to European Bail-In Directive

European Economic Area (EEA) financial institutions are now subject to a new set of regulatory requirements designed to avoid taxpayers bailing out banks in the event of another banking crisis — a central component of which is that EU member state bank regulators have been provided with broad new “bail-in” powers to write down (including to zero), convert to equity or otherwise modify unsecured liabilities of failing financial institutions.
These new rules require an “EEA financial institution” (defined below) to include a “contractual recognition of bail-in clause” in almost every document to which it is a party that is governed … Read more