How it works

The legal power to bail in creditors is only useful if a bank can actually implement it at speed over a resolution weekend. The bail-in playbook is the operational bridge between the authority's decision and its execution. It is documentation, maintained by the bank, that sets out how the write-down and conversion of eligible liabilities would be carried out: how the pool of bail-inable instruments is identified and quantified, how losses and conversion rates are applied across the creditor hierarchy, how the results are reflected in the bank's books and in securities systems, and how the outcome is communicated to authorities, investors, custodians, central securities depositories and the market.

A credible playbook depends on the bank being able to produce accurate, granular liability data quickly — the same data that feeds valuation in resolution — and on clear internal governance for who does what, in what sequence, and to what deadlines. It also covers the mechanics of suspending, cancelling, diluting or converting instruments, interacting with trading venues and settlement infrastructure, and issuing the new or converted securities that result from the bail-in.

The playbook forms part of a bank's broader resolvability work. It links closely to management information capabilities, to operational continuity arrangements that keep critical services running during execution, and to the loss-absorbing capacity a bank must maintain under MREL, which determines what is available to be bailed in.

The bail-in power that the playbook operationalises is set out in the BRRD, principally Arts. 43–44 and 48, with the corresponding provisions in the SRMR. The requirement to have executable arrangements — rather than the abstract power alone — is driven by resolvability. It is anchored in the removal of impediments to resolvability under BRRD Art. 17 and is elaborated through supervisory expectations rather than a single dedicated article, most prominently the Single Resolution Board's "Expectations for Banks", which set out the bail-in execution and management-information capabilities banks are expected to build. The precise sub-articles are refined by the authorities; the playbook itself is a supervisory and operational construct, not a defined legal instrument.

Relevance for banks and investors

For banks, the playbook is a core resolvability deliverable. Gaps in data quality, systems or governance can be treated as impediments to resolvability that the authority requires the bank to remove.

For investors, the existence and quality of bail-in execution capabilities affect how orderly and predictable a bail-in would be. Better-prepared banks reduce the operational uncertainty around how quickly instruments would be written down or converted and how the results would be reflected in the securities they hold.