Overview
Resolution is the orderly restructuring of a bank by a resolution authority when the bank is failing or likely to fail. This procedure ensures that a bank failure does not harm the broader economy or cause financial instability.
The single resolution mechanism (SRM) applies to banks covered by the single supervisory mechanism. It is the second pillar of the banking union.
If a bank fails despite stronger supervision, the SRM allows bank resolution to be managed effectively through
- a single resolution board
- a single resolution fund that is financed by the banking sector
The purpose of the SRM is to ensure an orderly resolution of failing banks with minimal costs for taxpayers and to the real economy.
The SRM regulation establishes the framework for the resolution of banks in EU countries participating in the banking union.
Single resolution board
The single resolution board, established by the SRM regulation, is a fully independent EU agency acting as the central resolution authority within the banking union. Together with the national resolution authorities of participating countries, it forms the SRM.
The mission of the SRB is
- ensuring the orderly resolution of failing banks with minimum impact on the real economy and the public finances of banking union countries
- managing the single resolution fund
Documents
- Γενική Διεύθυνση Χρηματοπιστωτικής Σταθερότητας, Χρηματοπιστωτικών Υπηρεσιών και Ένωσης Κεφαλαιαγορών
Memorandum of understanding between the European Commission and the Single Resolution Board in respect of certain elements of cooperation and information exchange pursuan
The Commission signed a memorandum of understanding (MoU) with the Single Resolution Board (SRB) on the modalities for their cooperation and information.
- Report
- Γενική Διεύθυνση Χρηματοπιστωτικής Σταθερότητας, Χρηματοπιστωτικών Υπηρεσιών και Ένωσης Κεφαλαιαγορών
Report on the application and review of the bank recovery and resolution directive and the single resolution mechanism regulation
This report on EU post-crisis rules for banks in difficulties concludes that at this stage it is premature to propose amendments to the BRRD and SRMR
- Γενική Διεύθυνση Χρηματοπιστωτικής Σταθερότητας, Χρηματοπιστωτικών Υπηρεσιών και Ένωσης Κεφαλαιαγορών
A backstop for the Single Resolution Fund
In its roadmap for deepening the EMU, the Commission proposes that the future European Monetary Fund serves as a backstop to the SRF.