Single Resolution Mechanism

Regulation 806/2014
European Union regulation
TitleEstablishing 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
ApplicabilityAll EU members. SRM provisions however only apply to Member States participating in the SSM.
Made byEuropean Parliament and Council            
Made underArticle 114 of the TFEU.
Journal referenceL225, 30.07.2014, p.1
History
Date made15 July 2014
Entry into force19 August 2014
Applies fromApplies in its entirety from 1 January 2016, conditional a prior transfer of contributions to the Single Resolution Fund has been met. Otherwise, it will apply in its entirety from the first day of the month following the day where the payment requirement has been met.
  • Articles 1-4, 6, 30, 42-48, 49, 50(1)(a)+(b)+ (g) to (p), 50(3), 51, 52(1)+(4), 53(1)+(2), 56-59, 61-66, 80-84, 87-95 and 97-98, apply from 19 August 2014 (2014-08-19).
  • Articles 69(5), 70(6)+(7), and 71(3), which empower the Council to adopt implementing acts and the Commission to adopt delegated acts, apply from 1 November 2014 (2014-11-01).
  • Article 8+9 and all related provisions elsewhere in the regulation, which empowers the Board to collect information and cooperate with the national resolution authorities for the elaboration of resolution planning, apply from 1 January 2015 (2015-01-01).
Other legislation
AmendsRegulation (EU) No 1093/2010
Current legislation
Agreement on the transfer and mutualisation of contributions to the Single Resolution Fund
Map of Europe with signatories and other EU members
Parties to the Single Resolution Fund
  Within the eurozone
  Outside the eurozone (applying the treaty)
  Outside the eurozone (not applying the treaty)
  Signatories that have not ratified
  EU members which may accede to the treaty
TypeIntergovernmental agreement
Signed21 May 2014 (2014-05-21)[1]
LocationBrussels, Belgium
Effective1 January 2016
ConditionEntry into force on the first day of the second month following the ratification by states representing 90% of the weighted vote of SSM and SRM participating states; but not before 1 January 2016[2]
Signatories26 EU member states (all except Sweden) including all 20 eurozone states[1]
Ratifiers
24 / 26
[3]
DepositaryGeneral Secretariat of the Council     

The Single Resolution Mechanism (SRM) is one of the pillars of the European Union's banking union. The Single Resolution Mechanism entered into force on 19 August 2014 and is directly responsible for the resolution of the entities and groups directly supervised by the European Central Bank as well as other cross-border groups. The centralised decision making is built around the Single Resolution Board (SRB) consisting of a chair, a Vice Chair, four permanent members, and the relevant national resolution authorities (those where the bank has its headquarters as well as branches and/or subsidiaries).

Upon notification from the ECB that a bank is failing or likely to fail, the Board will adopt a resolution scheme including relevant resolution tools and any use of the Single Resolution Fund, established by the SRM Regulation (EU) No 806/2014. The Single Resolution Fund helps to ensure a uniform administrative practice in the financing of resolution within the SRM. By 1 January 2024, the available financial means of the SRF will reach the target level of at least 1% of the amount of covered deposits of all credit institutions authorised in all of the participating Member States.

A Single Resolution Fund (SRF) to finance the restructuring of failing credit institutions was established as an essential part of the SRM by a complementary intergovernmental agreement, after its ratification.[4] If it is decided to resolve a bank facing serious difficulties, its resolution will be managed efficiently, at minimum costs to taxpayers and the real economy. In extraordinary circumstances, the Single Resolution Fund (SRF), financed by the banking sector itself, can be accessed. The SRF is established under the control of the SRB. The total target size of the Fund will equal at least 1% of the covered deposits of all banks in Member States participating in the Banking Union. The SRF is to be built up over eight years, beginning in 2016. By July 2023, the SRF had reached a size of €77.6 billion.[5]

  1. ^ a b Cite error: The named reference IGASIGN was invoked but never defined (see the help page).
  2. ^ "Agreement on the transfer and mutualisation of contributions to the Single Resolution fund" (PDF). Council of the European Union. 14 May 2014. Retrieved 29 May 2014.
  3. ^ Cite error: The named reference depositary was invoked but never defined (see the help page).
  4. ^ "Commission proposes Single Resolution Mechanism for the Banking Union". European Commission. 2013-07-10. Retrieved 2014-05-29.
  5. ^ "Single Resolution Fund grows by €11.3 billion to reach € 77.6 billion". Single Resolution Board. 6 July 2023.

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