Single Resolution Mechanism

The Single Resolution Board (SRB) having its head office in Brussels is, within the Banking Union, the competent resolution authority for entities and groups directly supervised by the European Central Bank and other cross-border groups.

Following Regulation (EU) No 806/2014 of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 (Single Resolution Mechanism Regulation, SRMR), the SRB forms together with the national resolution authorities of the Banking Union the Single Resolution Mechanism (SRM). The purpose of the SRM is to ensure an orderly resolution of failing banks with minimal costs for taxpayers and for the real economy.

Where necessary, the SRB will use the Single Resolution Fund (SRF) to ensure the efficient application of the resolution tools and the exercise of the resolution powers conferred on it. The SRF is built up by the contributions from all entities of the Banking Union and shall reach its target level of at least 1% of the amount of all covered deposits of all credit institutions within the Banking Union by 31 December 2023. The specific provisions governing the functioning of the SRF are subject to an Intergovernmental Agreement.

Resolution at national level

The Law of 18 December 2015 on the failure of credit institutions and certain investment firms (“2015 Law”), which, notably, transposes Directive 2014/59/EU of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms (Bank Recovery and Resolution Recovery Directive, BRRD), designates the CSSF as the national resolution authority (NRA) in Luxembourg. The CSSF exercises the missions and powers assigned to it as resolution authority through the CSSF Resolution Board, whereas the CSSF Resolution department performs the day-to-day tasks related to these missions.

Entities under the remit of the CSSF Resolution Board are by default the ones that are not under the remit of the SRB.

In line with the distribution of responsibilities following the SRMR, between the CSSF Resolution Board and the SRB, the CSSF Resolution department is especially in charge, at individual and group level, to submit the following for decision to the CSSF Resolution Board:

  • adopting resolution plans and resolvability assessments;
  • measures to address or remove impediments to resolvability;
  • applying simplified obligations or granting waivers, among others, to the obligation to draft a resolution plan;
  • setting the minimum requirement for own funds and eligible liabilities, in particular its level;
  • adopting resolution decisions and applying resolution tools in accordance with the relevant procedures and safeguards;
  • writing down or converting relevant capital instruments;
  • executing the instructions issued by the SRB.

As regards collaboration with the SRB, members of the CSSF Resolution department are involved directly in the preparation and drafting of resolution plans of Luxembourg significant banks under the competence of the SRB. They also participate, within the Internal Resolution Teams coordinated by the SRB, in preparing and drafting resolution plans for significant banking groups in the Banking Union which have Luxembourg subsidiaries.

Documentation

Laws, regulations and directives

Circulars

Guidance

Publications

  • 14 June 2019 Adoption of the risk-reduction measures package – Revised rules on capital requirements (CRR II/CRD V) and resolution (BRRD/SRM-R)
    Press release 19/22
    Press release
  • 28 September 2016 Internal rules of the Consultative Committee for Resolution (only in French)
    Internal organisation
  • 25 March 2016 List of members of the Consultative Committee for Resolution
    List
  • 24 March 2016 Mr Romain Strock sworn in by the Minister of Finance as Director Resolution
    Press release 16/16
    Press release
  • 10 October 2014 Reference document of the European Banking Authority (EBA) and Financial Stability Board
    Adequacy of loss-absorbing capacity of global systemically important banks in resolution (pdf)
    Studies and reports

Contact

Resolution Department
(+352) 26 251 - 2676
Last update: 04 May 2020