The International Approach to Cross-Border Resolution

The financial crisis started in 2008 has brought to the fore the imbalance between the growth in cross-border banking business and structures in the run-up to the crisis and the national framework dealing with bank crisis management. As Mervyn King—and before him, Thomas Huertas—argued, banks proved to be international in life and national in death. In the midst of the crisis, national concerns on the potential fallout in local markets translated into ring-fencing practices, which in turn prevented liquidity and capital to flow freely within cross-border groups, ultimately resulting in a deepening of the crisis. Obviously, such unilateralism and lack of coordination paved the way for the enforcement of the implied state guarantee via massive state bail-outs. Ring-fencing practices have also generated adverse consequences on the transmission channels of the single monetary policy within the euro area, as they created a negative, self-reinforcing loop between banks and their sovereign.

The regulatory challenge to end the too-big-to-fail problem proved daunting. There was unanimous consensus among policymakers that the solution to the troubles originating from cross-border interconnectedness had to be found at the international level. To avoid the imbalance identified by King, some international mechanisms had to be put in place to coordinate crisis management and make banks more international also in their death. The Financial Stability Board (FSB) has, therefore, been entrusted with the task of developing a set of substantive principles on crisis management and resolution, aimed at resolving financial institutions in an orderly fashion, to preserve financial stability and minimize the use of taxpayers’ money under an international cooperation framework. Such a policy mix of harmonization and creation of a coordinated infrastructure is intended to discourage behaviors pursuing purely national objectives and to tackle the collective action problems experienced during the crisis. Absent confidence that a cooperative solution would prevail in a cross-border crisis, each authority faces a strong incentive to ring-fence local operations as a means to provide additional safeguards to domestic depositors and operations.

Along these lines, the FSB’s “Key Attributes of Effective Resolution Regimes for Financial Institutions” (“Key Attributes”) identified in 2011 a body of agreed substantive principles on crisis management.¹ These include the establishment of a new authority responsible for resolution matters and endowed with a specific resolution toolkit, as well as the establishment—for global systemically important banks (G-SIBs)—of firm-specific, cross-border networks of national authorities, the crisis management groups (CMGs), governed by an ad hoc Cooperation Agreement. These principles are complemented by guidance on the coordination of legal systems to ensure cooperation and recognition of cross-border resolution actions.

Resolution, however, cannot be orderly without a clear view on its financing, including in the cross-border context. This aspect directly touches upon the adequacy of the loss-absorption capacity and the regulatory response to ring-fencing practices experienced in the course of the financial crisis. The FSB response laid down in the total loss absorbing capacity (TLAC) Term Sheet (TLAC Standard), published on November 9, 2015,² attempts to strike a balance between international cooperation and domestic comfort on the sufficiency of loss-absorption capacity at the local level. In general, an adequate level, quality, and distribution of TLAC will be key to reinforce the mutual trust between home and host authorities on the fact that G-SIB failure can be managed without endangering the local depositors and the local economies. The capacity of banks to stand on their own legs is essential to overcome legal obstacles to cross-border flows. In particular, the internationally agreed criteria on the internal distribution of TLAC across the various subsidiaries of the G-SIBs represent an important incentive-based mechanism to make cooperation between home and host more credible. By ensuring that parent companies have sufficient “skin in the game” in the various subsidiaries, these criteria might provide adequate reassurance to host authorities, and hence persuade the latter against triggering uncoordinated ring-fencing measures.

The progress accomplished by international standard-setting bodies is highly commendable. Strengthened exchanges of information, enhanced preparedness and coordination among authorities are key to ensuring predictability of behavior and the pursuance of common objectives by national authorities.³

Good intentions and good results, however, should not exempt us from asking the fundamental question of whether the regulatory plan was ambitious enough as regards cross-border resolution or whether, leveraging on the momentum generated by regulatory reforms, the development of an international treaty should have been considered. After a financial crisis of such proportions, with widespread international ramifications, the possibility of putting cross-border crisis management and bank resolution on more firm legal grounds should have been given some consideration. Legal uncertainty on the enforceability of informal agreements based on soft law might still lead national authorities to prefer the solid reassurance provided by sizable local capital and liquidity buffers to the informal commitments to cooperate in a crisis.

In the European Union, high-level memoranda of understanding had been agreed in the early 2000s but did not prove effective in fostering cooperative solutions during the crisis. The European response to the crisis was to build a stronger legal framework for cross-border resolution. But it is understandable that at the international level, reaching consensus on the complex and newly conceptualized resolution goals and toolkit retained full priority, whereas the pursuit of legally binding international treaties would have been a much more demanding and uncertain endeavor. The foundations for future work on cross-border coordination and enforcement of resolution actions have been laid down and should not be abandoned, but rather be maintained in the regulatory agenda. The continuous FSB engagement in cross-border aspects of resolution, including the development of the Principles for Cross-Border Effectiveness of Resolution Actions,⁴ and the current analysis on the implementation of the resolution framework in the cross-border context, show the need for further refinements in order to achieve proper effectiveness.

In line with these considerations, this chapter will first illustrate the regulatory overhaul undertaken at the EU level, focusing in particular on the cooperative infrastructure and the cross-border financing of resolution, arguing that by relying on hard law, European authorities, mechanisms for the settlement of disagreements, and the European Treaty umbrella, the EU resolution regime is the most advanced implementation of the FSB cross-border crisis management framework. I will then turn to the global dimension to note that countering ring-fencing practices through cooperative behavior is a major challenge: it requires that national authorities build sufficient reciprocal trust and strictly abide by their commitments to cooperation in a cross-border crisis, even when the national interest seems to point in a different direction. As will be illustrated, recent regulatory measures and initiatives seem to signal that authorities may instead be tempted to segment business along jurisdictional lines, so as to make banks less international in life and allow their crises to be better managed with national tools.

The Eu Resolution Framework and Cooperation Architecture

The EU framework implementing the FSB Key Attributes is set out in Directive 2014/59/EU on recovery and resolution of credit institutions and investment firms (Bank Recovery and Resolution Directive [BRRD]). It lays down an EU-wide substantive crisis-management regime for both the going and the gone concern phases; it relies on ex ante preparedness via the development of recovery and resolution plans and on a powerful resolution toolkit conferred upon the newly established resolution authorities. The BRRD regime has been further specified in numerous technical standards and guidelines developed by the European Banking Authority (EBA) providing for specific guidance to resolution authorities and firms on topical parts of the BRRD.⁵ A Single Rulebook for the whole European Union is, therefore, in place and is further clarified through the EBA’s Q&A tool.⁶

The crisis management framework marks a significant step making banks cognizant of the need to consider, when developing their business models, how to remedy crisis scenarios in a way to preserve the critical functions and the core business lines. The ex ante preparatory work is key to the credibility of the new regime and the feasibility of orderly resolution or, to put it differently, to the removal of the implicit state guarantee. A forward-looking approach should also be part of supervisory practices at the time of licensing of a subsidiary or of a branch of an international group. The current EBA draft Regulatory Technical Standards on authorization of credit institutions move in this direction by requiring the applicant to submit the recovery plan for the bank to be licensed.⁷

In line with the FSB Key Attributes, the BRRD substantive provisions are complemented by a cross-border administrative structure aimed at ensuring authorities’ cooperation and at overcoming collective action problems. Finally, the EU framework is completed by the umbrella regime of mutual recognition enshrined in Directive 2001/24/EC on the reorganization and winding-up of credit institutions (“Directive 2001/24/EC”). This principle ensures that reorganization measures enjoy automatic effects throughout the European Union. Given that resolution tools and resolution powers are included in the definition of reorganization measures, the overarching principle of mutual recognition is a powerful tool to ensure the cross-border effectiveness of resolution actions and to bridge the gaps where coordination of legal systems is insufficient.

Eu Administrative Cooperative Networks

Unlike the FSB regime where CMGs are envisaged to be set up only for G-SIBs, at the European level such networks of authorities have been extended to all cross-border groups regardless of their size and have been expressly disciplined in binding legislation. The resolution college is the platform for European cooperation, open also to non-EU authorities, both in the preparatory phase of resolution planning and in actual resolution. Drawing from the parallel experience of supervisory colleges, cooperation is epitomized in the legal requirement that for each cross-border bank, relevant resolution authorities achieve joint decisions on certain significant elements of the preparatory phase such as the resolution plan, including the resolution strategy, the removal of impediments to resolvability, and the setting of the minimum requirements for own funds and eligible liabilities (MREL).

Whereas CMGs rest on nonbinding memoranda of understanding among authorities embodying a mutual intention to cooperate in accordance with the terms of the memorandum, the functioning of the resolution college is governed by the BRRD and is further specified in Commission Delegated Regulation (EU) 2016/1075, endorsing the EBA regulatory technical standards on resolution colleges. Procedural requirements, including steps and deadlines, are not a goal per se but instruments to strengthen cooperative approaches. To mark the importance of coordinated action to ensure orderly resolution—as well as to preserve the integrity of the internal market and financial stability across the European Union—the EBA is entrusted with a mediation role to facilitate the reaching of a joint decision in case of disagreement between the relevant authorities. When requested to provide assistance, the EBA’s mediation function has proven effective. Mediation cases usually find an amicable solution in the conciliation phase, thus minimizing potential conflicts and optimizing sincere cooperation between the authorities concerned. But if home and host resolution authorities fail to achieve an agreement, the EBA could issue a binding decision requiring them to take specific action or to refrain from action in order to settle the matter.

The latest step in the move toward the strengthening of the cross-border resolution framework in the European Union is the institutionalization of the authorities’ administrative cooperation in the context of the Banking Union, which includes all the member-states adopting the euro. A new authority, the Single Resolution Board, has been established within the Single Resolution Mechanism, thus complementing the Single Supervisory Mechanism, which has centralized supervisory responsibilities at the ECB. Whereas the Single Resolution Mechanism relies on the cooperation network of the national resolution authorities, both in the preparation phase and in the execution of its resolution decisions, the centralized decision-making power at the European level is major step forward.⁸ This momentous change in the institutional setup for crisis management was achieved by designing a delicate balance between national and European interests. The involvement of several EU and national institutions in the decision-making process may be a source of complexity and of potential challenge in time constraints. Some streamlining could be considered, in light of recent interpretations of the European Treaty by the European Court of Justice, which would allow a framed exercise of discretionary powers by European agencies.⁹

Resolution Planning: Preferred Resolution Strategy and Financing

With the legal framework now in place, the focus has shifted from regulation to implementation and operationalization—a fresh challenge for both the recently established authorities and firms. The preparatory phase is essential, as orderly resolution can only be achieved if it is planned in advance, and all authorities involved are committed to implementing the preferred resolution strategy when a bank is failing or likely to fail. The experience gained during the crisis has matured the conviction that the only way to prevent future repatriation of business, ring-fencing of capital and liquidity, and the segmentation of the internal market is to prepare in advance and lay down precise commitments to cooperation in legally binding decisions. Until an effective preparatory phase is carried out, it is premature to say that the “too-big-to-fail” issue has been properly addressed.

The EBA participates in several resolution colleges and CMGs and has gained a broad perspective on the state of the art as regards the preparatory phase.

Broadly speaking, the preparatory phase relies on two critical features: (1) the determination of the resolution strategy identifying the resolution point(s) of entry, and (2) the determination of the TLAC/MREL and related allocation within the group. The planning exercise (including the choice of the preferred resolution strategy) is underpinned by an in-depth analysis of the bank’s critical functions, core business lines, and funding structure, as well as of the assessment of the separability of parts of its business and functions.

We appreciate the efforts made by the authorities so far in the European Union. At the same time, we are mindful that resolution planning is an iterative process. More efforts are required in the months and years to come to achieve a proper operational plan. We are urging resolution authorities to intensify their work in order to reach a satisfactory steady state in the short term. The achievement of joint decisions on the preferred resolution strategy is a tangible implementation of the cooperation framework enshrined in the new legislation. However, the delay in the adoption of decisions on the TLAC/MREL requirement, due also to the instability of the regulatory framework, signals that there is still some distance to the finishing line and that speed has to be increased in order to achieve effective resolution planning.

There is no one-size-fits-all, and depending on the group structure, funding model, interconnectedness, and centralization of functions, a single point of entry (SPOE) or a multiple point of entry (MPOE) strategy may be appropriate. The SPOE is particularly suitable for those banking groups that are highly interconnected and operationally and financially centralized. Under this strategy, the resolution action is in principle concentrated only at the top level of the group, without affecting the operating subsidiaries. The underlying rationale is precisely to ensure that such operating subsidiaries are able to continue running their business without being put under resolution. The view from the top is meant to ensure the smooth implementation of the strategy and the preservation of the group’s functions and value.

To be successful, this strategy must rely on an intragroup funding model enabling the up-streaming of losses from the operating subsidiaries and the down-streaming of capital. External bail-inable debt is issued at the group’s top level, to ensure the smooth write-down of capital instruments and absorption of losses by minimizing the interference in the operational continuity of the distressed institution. The SPOE is not inconsistent with a corporate structure where an operating company (rather than a holding company) is at the top; however, the write-down of capital instruments and of eligible liabilities can be better achieved by making the eligible liabilities subordinate to the operating liabilities in order to minimize disruption and to respect the “no creditor worse off” safeguard. The introduction of a new EU harmonized creditor class of senior nonpreferred claims ranking above subordinated and below senior debt marks an important step for the operationalization of the resolution strategy.¹⁰ In a cross-border scenario, the SPOE strategy is likely to reduce the legal risk intrinsic in multijurisdictional contexts, as resolution action—notably the write-down and conversion of capital instruments and eligible liabilities—is predominantly concentrated in the home authority jurisdiction. The existence of an SPOE curtails the need for recognition and enforcement of resolution measures in other countries.

The MPOE strategy envisages more than one point of entry for resolution actions and is better suited for the less financially and operationally interconnected groups, where treasury, liquidity, and support functions are carried out in an autonomous rather than a centralized manner. The rationale underlying the MPOE strategy is the low level of interconnectedness with the rest of the group, making it in principle more “territorial” in scope. However, given that the MPOE entails the decentralization of the resolution strategy, a high level of coordination and cooperation is needed among the authorities responsible for the various resolution subgroups, both those affected by the resolution and those that are not. The group-level resolution authority must be satisfied with the mechanisms put in place to control any adverse impact—including on financial stability—of the resolution of one part of the group on the rest of the group. Such analysis and coordination planning should be established ex ante in the context of the resolution college and laid down in the resolution plan. The plan should also clearly set the perimeter and the separability of the reach of each point of entry to ensure the achievement of the resolution objectives.

Financing of Resolution in Cross-Border Groups and Controlled Ring-Fencing

Viewed from the ring-fencing perspective, the SPOE and MPOE strategies are neutral, given that they reflect the operational and funding organization of the group and their degree of centralization of functions—to the extent the subsidiaries subject to MPOE strategy are truly independent from the group, it hardly results in ring-fencing. Where the SPOE is adopted for group resolution strategy, it is well-suited to ensure cross-border group orderly resolution. This is because the existence of one exclusive point of entry for the whole group suggests that the view from the top provides the possibility and flexibility to efficiently manage an internal group crisis regardless of where such entities are located. To be effective, the SPOE must rely either on internal group coordination to make sure that asymmetric shocks are absorbed or on cross-border administrative cooperation to ensure that sufficient capital and loss-absorbing capacity is present or transferred where needed.

The availability of internal financial resources is central to resolution, as the success of the whole process rests on the bank’s own capacity to absorb losses and regain market confidence. The internalization of losses represents the paradigm shift of the new crisis management regime, which excludes any ex ante reliance on public financial support. The BRRD MREL that has been better specified in the EBA regulatory technical standard, endorsed by the Commission Delegated Regulation (EU) No. 2016/1450, lays down the criteria for setting such a firm-specific requirement. MREL is composed of a loss-absorption amount and of a recapitalization amount to be determined on the basis of the capital requirements, having regard to the main features of the firm, and in accordance with the preferred resolution strategy indicated in the plan. The rationale of this EU requirement reflects the global policy on loss absorption for the G-SIBs, developed by the FSB TLAC term sheet. But at the same time it is flexible enough to be adapted to the specific features of banks of all sizes and with very different business models.

The European Commission in November 2016 submitted a Proposal of Directive to implement such TLAC standards within the European framework, integrating it within the MREL requirement with a view to ensuring that both requirements are met in a consistent manner and with largely similar instru-ments.¹¹ This chapter will briefly make reference to the group and the intragroup allocation of the eligible liabilities with a view to furthering the analysis of the cross-border aspects of the preferred resolution strategy and the tension between cooperation and ring-fencing.

The BRRD provides that MREL has to be complied both at the consolidated and at the solo level. The solo requirement is to be determined having regard, inter alia, to “the size, business model and risk profile of the subsidiary, including its own funds” and to the level set at the consolidated basis. The current version of the BRRD does not distinguish between external and internal MREL—that is, between loss-absorbing instruments issued to external investors and financing from the parent company. The distinction has been introduced by the Commission Proposal of November 2016, following the FSB’s guidance on TLAC. Where a resolution college for cross-border groups is established, both the consolidated and the solo levels of MREL should be determined by a joint decision of the resolution authorities within the college. Only in the absence of an agreement or a request for EBA’s mediation are the parties allowed to take individual decisions.

Needless to say, these are crucial steps of the resolution planning exercise, setting the balance between controlled ex ante ring-fencing and smooth intra-group cooperation. Such a trade-off is present also in the current version of the BRRD providing for waivers of the requirement at the solo level when the subsidiary and the parent company belong to the same member-state and the other conditions set out in Article 45(12) are met. The Commission Proposal of November 2016 introduces the notion of internal MREL as a means to ensure that losses are absorbed and up-streamed to the parent resolution entity under the preferred resolution strategy. In this context, the Commission Proposal expands the reach and modality of intra-EU cooperation for intra group cross-border matters. In particular, the Commission Proposal envisages that the internal MREL may be replaced by a collateralized commitment by the parent to the subsidiary, provided that certain conditions are met, subject to the partial collateralization of such commitment replacing the internal MREL. It is regrettable that the proposal does not go further in relaxing the ex ante controlled ring-fencing to banking groups established in the Banking Union that are subject to single supervision of the European Central Bank and to the single resolution mechanism with the Single Resolution Board at its center. The balancing exercise between host authorities’ comfort against potential adverse fiscal impacts of bank failures and a smooth and cooperative setup allowing for the transfer of capital and liquidity within the group where the circumstances so require, is still too unbalanced in favor of ex ante-controlled ring-fencing. The earmarking of capital and liquidity along jurisdictional borders, instead of its free movement within the group to absorb asymmetric shocks, ends up hindering the benefits of the “singleness” of new institutional architecture.

Administrative Cooperation and Resolution Planning in the Global Dimension

The resolution framework in the global dimension reflects the FSB Key Attributes, but unlike the EU regime, it rests on soft law rather than on binding legal sources and procedures. A cooperation infrastructure—in the form of a network of administrative authorities—the CMG is envisaged to be set up for each firm and be governed by an ad hoc memorandum of understanding. This is the forum for discussion and agreement of the resolution-planning activities, including the preferred resolution strategy, and TLAC matters. No formal decision is taken, however, and in the absence of supranational authorities tasked with a monitoring and coordination function, defective behaviors are more likely than in the EU financial architecture. At the global level, therefore, collective action problems are still more likely than in the binding coordinated setting in place in the European Union.

It is not surprising that the “soft” cooperative setup has inspired recent regulatory developments on both sides of the Atlantic to introduce (or proposed, in the case of the European Union) an intermediate parent company on top of the entities operating in the United States or the European Union, respectively, when certain conditions are met. The Foreign Bank Organization rules in the United States have already implied a significant restructuring of the legal structures of European banks conducting business there. Similarly, under new legislation proposed by the European Commission, a European intermediate parent undertaking would have to be established by non-EU G-SIBs or when the total value of assets of the third country group is at least €30 billion.¹² Such an entity would have to be licensed as an institution or as a financial holding company and consequently required to comply with all the local regulatory requirements on a consolidated basis. Although such requirements are supposed to support the resolution strategy and to provide confidence to the host authorities, they clearly entail a trade-off with the group’s central funding management of liquidity and capital, potentially affecting cross-border business strategy.

Effectiveness of the Implementation of Cross-Border Resolution Actions: The Legal Tools

In a multi-jurisdictional context, legal risk may hinder the effectiveness of resolution actions where regulatory asymmetries give rise to unenforceable actions. Along with harmonization of the substantive regime and cooperation between authorities, coordination of legal systems is the third pillar of the resolution framework. This is essential to ensure that measures taken in the home jurisdiction deploy effects in the host jurisdiction. The classic technique to achieve this result is the judicial or administrative recognition process, aimed at ascertaining whether certain legislative conditions are met, and the effects of the measure are consistent with national law. In insolvency matters, a key factor determining whether a measure may be recognized relates to the treatment of (local) creditors, which is often an aspect of the general clause of public policy.

Under the EU regime, such a recognition process is discarded in favor of automatic mutual recognition of the resolution action that is adopted by the resolution authority of one member-state in the territory of other member-states. This effect has been achieved by including the resolution tools and the resolution powers within the definition of “reorganisation measure” covered by Directive 2001/24/ EC on the reorganization and winding-up of credit institutions, which enjoy automatic effects throughout the European Union in accordance with the law of the home jurisdiction. Needless to say, mutual recognition is a powerful technique that brings mutual trust and cooperation at its peak by dismissing, from the outset, potential claims stemming from the extraterritorial exercise of sovereign powers. This entails the outright exclusion of any interference of local laws with the law of the home jurisdiction. For this purpose, the BRRD clarifies that the creditors cannot raise claims on the basis of the law governing the financial instruments that have been written down or the law where the assets are located (Article 66(3)). This provision is complemented by the requirement that the host jurisdiction must ensure that the write-down and conversion of the principal amount is effective on the basis of the law of the resolution authority that has adopted the measure, and that creditors are prevented from filing challenges on the basis of the law of the host jurisdiction (Article 66(4) ad (5)).

Along the same lines, it is specified that the “safeguards for partial transfers” (no creditor worse off) are governed by the law of the member-state of the home resolution authority. The central role of the home authority jurisdiction is further confirmed by the provision that challenges that the measures adopted by the home resolution authority are governed by the law of that home jurisdiction (and have to be filed in that forum). All these elements concur in pointing to one single jurisdiction, the home member-state, as the only competent one to achieve cross-border effectiveness. This to some extent fills (potential) flaws of harmonization with the extended application of the lex fori. It is clear that such architecture has to stay waterproof as gaps may jeopardize the whole cross-border construction. A stepping stone in this direction was a 2016 judgment of the UK Court of Appeal.¹³ That judgment reversed the ruling of the High Court in Goldman Sachs v. Novo Banco, where the claimant, on the basis of a contractual choice of venue in favor of the English court, tried to be exempted from the jurisdiction of the Portuguese administrative courts in relation to a claim pertaining to the effects of the resolution action adopted by the Bank of Portugal in the context of the resolution of Banco Espirito Santo. The Court of Appeal’s ruling emphasized the relevance of mutual recognition of resolution actions and provided a broad, result-oriented interpretation of reorganization measures, favorable to maximize the effectiveness of cross-border resolution, along the lines of the Court of Justice decision in the Kotnik case.¹⁴

Contractual Recognition Clauses

The hurdles of recognition of resolution proceedings may be even higher in the relationship between countries not belonging to regional organizations. Authorities are working on the best legal way to ensure recognition of the effects of resolution actions in such cases. The FSB Key Attributes provide guidance for the judicial or administrative recognition of foreign resolution actions. Admittedly, recognition of extraterritorial effects to the kinds of administrative measures that may also affect the fundamental right to property is a new and complex process. By expressly including provisions aimed at this result, legislators have taken a stance in favor of coordination of legal systems. However, the extent of such coordination is still untested.

The inclusion of contractual terms is a pragmatic solution to manage the risks of gaps between legal systems. This technique is provided in Article 55 BRRD requiring, for those contracts governed by the law of a third country, the inclusion of a clause whereby the counterparty of the financial institution acknowledges and accepts that the home resolution authority, when conditions are met, may use the bail-in tool and write down and convert the principal amount of the liability.¹⁵ Similar clauses have been elaborated by the International Swaps and Derivatives Association, in close cooperation with the FSB, to ensure the contractual recognition of suspension orders adopted by the resolution authority. The goal is ensuring full cross-border effectiveness of such resolution stays and avoiding the triggering of default or cross-default clauses upon the financial counterparty’s entry in resolution.

In the current state of development of resolution practice, the use of contractual recognition clauses has the undisputed potential of minimizing legal risks, by confining the legal impact of the resolution action to one single jurisdiction. This does not mean that the home resolution authority may abstain from requesting any kind of support from the authorities in host countries. For instance, it might need supervisory approval for the change in control of a subsidiary in the host jurisdiction or for other supervisory measures. Unlike resolution actions, however, the adoption of measures may not necessarily entail going through a judicial or administrative recognition process, even in a resolution scenario. In those jurisdictions where this is possible, such a combination of contractual recognition clauses and support measures may greatly enhance the chances of cross-border effectiveness of resolution actions.