Unidroit publishes legislative guide on bank liquidation

25 September 2025

Unidroit (International Institute for the Unification of Private Law) published the Legislative Guide on Bank Liquidation on its website today (see link).

The Guide is intended to assist policymakers and legislators in designing effective liquidation frameworks that are tailored to the special nature of banks and their role in the economy. It is particularly aimed at countries that do not yet have dedicated legislation on bank liquidation and those wishing to strengthen their regulatory frameworks in this area.

Focusing mainly on non-systemic banks, the Guide complements the international standards on the resolution of systemic banks issued in 2011 by the Financial Stability Board ('Key Attributes of Effective Resolution Regimes').

This initiative started in 2019 on the proposal of Banca d'Italia and the European Banking Institute. It was supported by the Financial Stability Institute of the Bank for International Settlements (BIS), with input from a working group of academics with expertise in banking and financial law, representatives of national and supranational financial sector authorities and central banks (including the European Central Bank, the Single Resolution Board and the European Commission), standard setters and international organizations (including the International Monetary Fund and the World Bank).

The Guide provides a significant contribution to the international and European debate on crisis management at small and medium-sized banks, leveraging the experience gained over decades by countries such as Italy, which have advanced regulatory frameworks for bank crisis management. These frameworks are centered on the sale of the bank in crisis to a third-party acquirer, under the control of an administrative authority with the required expertise. It uses funds from the deposit guarantee scheme within the limits allowed by the least cost test, in order to preserve the stability of the banking system.