Overview

On 13 July the Federal Ministry of Finance (Bundesfinanzministerium) published an initial draft (Referentenentwurf) of the Restructuring Act (Restrukturierungsgesetz) (Act).

The overall aim of the Act is to establish a regime for the organised winding-up of credit institutions. The Act introduces, amongst other things, a two-tier reorganisation procedure, provisions for the transfer of the whole or parts of the business of “too big to fail banks” to other banks or state run “bridge banks” (Brückenbanken) and an extension of the statutory limitation period in respect of directors’ liability. The Act also provides for several amendments to existing supervisory law.

There is a direct link between the Act and the experiences of the Federal Ministry of Finance during the credit crisis, in particular with regard to the nationalisation of Hypo Real Estate. Accordingly, the underlying objective of the Act is to ensure that the dissolution of credit institutions is achieved without jeopardising or otherwise affecting the stability of the financial market.

To read on click ‘View Briefing