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ICMA Bail-in Working Group
Comprised mainly of buy-side participants, the ICMA Bail-in Working Group is a committee of, and reports into, the ICMA Asset Management and Investors Council (AMIC). While it is recognised that in the new world of “bail-in”, the investment community, particularly in the bond market, must bear some of the brunt of future bank failures, the Bail-in Working Group seeks to explore issues around the operation of bail-in mechanism in order to form a consensus from among its members as to its effects on investor demand for bank capital.
In this regard, conclusions of the Bail-in Working Group include that there is a need for clarity and transparency, allowing comparability and predictability of the new regulatory environment in which the banks throughout Europe operate. It also advocates: consistency and clear communication; predictability of the practical application of resolution powers and the various triggers along the capital structure; standardisation and homogeneity, in particular when it comes to a framework for achieving subordination; clarity around valuation methods and fairness as to how losses are attributed. Ultimately, the Group aims to reassure the market and preserve confidence by ensuring that bank capital remains a sustainable and investible proposition, with debt markets available at reasonable prices to provide banks with necessary liquidity. Mindful of these goals, the Bail-in Working Group regularly represents its collective views to central banks, policy makers and regulators with a view to engaging them in constructive and open dialogue.