Lagarde: EU Banks Have Limited Exposure to Credit Suisse

The transcript discusses the limited exposure to Credit Swiss, particularly in relation to the 81s, and the decision by Swiss authorities under Swiss law. It highlights that Switzerland does not set standards for the EU, which are determined by EU regulations and directives. The resolution framework in the EU, established after the financial crisis, dictates the order of loss absorption, with common equity instruments first, followed by additional tier one instruments. This approach is consistently applied in crisis interventions.

What does the resolution framework in the European Union establish regarding shareholders and creditors of a troubled bank?

What is the pecking order for absorbing losses in a troubled bank as per the text?