Single Resolution Mechanism (SRM)

The Single Resolution Mechanism (SRM) complements the SSM via which the ECB is, since November 2014, in charge of the banking supervision in the euro area and other Member States which decide to join the Banking Union. If a bank subject to the SSM encounters serious difficulties, the SRM would be able - notwithstanding stronger supervision - to ensure that its resolution is managed efficiently with minimal costs to taxpayers and the real economy. The SRM is the 2nd pillar of the Banking Union.

 

For this purpose, the SRM set up a Single Resolution Board, which will prepare the resolution of a deficient bank and monitor the execution of the resolution plan by the national resolution authorities and a Single Bank Resolution Fund funded by contributions from the banking sector and replacing the national resolution funds of the participating Member States. The specific provisions governing the functioning of the Single Bank Resolution Fund were subject to an intergovernmental agreement.

 

The SRM is fully operational and applies since 1 January 2016.

 

 

 

BRRD

The uniform substantive rules laid down in the directive establishes the framework for the recovery and resolution of credit institutions and investment firm (BRRD) apply to the participating Member States as well as to the entire internal market.

Useful documents

Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 (BRRD)

 

Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014