UK and EU diverge on contractual swap stays

UK scraps pre-resolution stays, while EU regulators could opt for even stricter measures

The UK has signalled its first major regulatory break with the European Union, over pre-resolution stays that give supervisory authorities the power to prevent the termination of financial contracts with a bank on the brink of failure.

The new requirements are contained in the second Bank Recovery and Resolution Directive (BRRD II), which must be implemented by EU member states on December 28. The European Banking Authority is finalising a regulatory technical standard (RTS) to enforce Article