A term that emerged around 2013 in connection with the Single Resolution Mechanism. According to the waterfall principle, shareholders, creditors and depositors are initially liable for very high amounts in the event of the failure of an institution. If this is not enough, national resolution systems and the new resolution fund for the euro area adopted in 2014 are to step in. – See resolvability, investment liability, bailout, bank, systemic, bank bailout, Bank Recovery Act, bank testament, banking union, bazooka, depositor liability, G-Sifi, creditor priority, moral hazard, emergency fund for crisis banks, rescue, bailout umbrella, shadow state, stability fund, European, too big to fail principle, transfer union, contractual compliance, zombie bank, forced convertible bond. – Cf. 2013 Annual Report of the Deutsche Bundesbank, pp. 36 ff. (detailed presentation), Monthly Report of the Deutsche Bundesbank of June 2014, p. 40 (overview of the liability cascade).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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