The precautionary recapitalisation of failing banks: the undefined distinction between G-SIBs and D-SIBs

The new resolving tools introduced in the EU banking recovery and resolution regime that aim to reduce the intervention of regulatory au-thorities constitute a challenge for supervisors and market actors. This article examines the controversial aspects of rescue plans for failing banks taking into consideration the restructuring options such as bail-in, State aid and bailout. In the case of Banca Monte dei Paschi di Si-ena, although the bank is not global systemically important it has been identified as a domestic significant bank and it can produce a serious impact in other fragile financial institutions. On this view, the undefined distinction between global systemically important banks and domestic systemically important banks represents a real concern to the banking regulators, and it allows a margin of discretion for the national authori-ties in the assessment of restructuring tools.