On January 1, 2016, the European Union’s “bail-in” provisions went into effect. The bail-in provisions, authorized under the Bank Recovery and Resolution Directive (BRRD) and implemented by the Single Resolution Mechanism (SRM), provide for financial resolution of covered institutions by cancelling or reducing liabilities of a failing bank, or converting debt to equity, as a means of restoring a financial institution's capital position. The bail-in provisions apply to obligations incurred as of January 1, 2016, and as such when covered institutions enter into transactions governed by non-European law, their contracts need to include a “contractual recognition provision” which gives notice of the bail-in liabilities and obtains acknowledgment by the other parties to the transaction. While borrowers may not readily identify themselves as creditors of their lenders, the liabilities to which the bail-in provisions apply include obligations of lenders to a borrower which might arise under typical loan agreements, including undrawn commitments. On April 10, 2016, HETA became the European Union’s first bank to be bailed-in pursuant to these provisions.