Insolvency ranking for banks in Liechtenstein law

The insolvency ranking of liabilities plays an important role in the resolution of banks even outside of insolvency. This is because the regulatory loss cascade, for example when implementing the write down and conversion of capital instruments (WDCCI) or the bail- in instrument is fundamentally based on the insolvency ranking.

Commission Implementing Regulation (EU) 2021/763 requires the resolution authority to disclose information on the ranking of bank liabilities in the national insolvency proceedings. By publishing the special legal insolvency ranking, the FMA contributes to higher legal certainty and transparency.