Resolution

Establishing bank resolution funds

Communication (COM(2010) 254 final) — Bank Resolution Funds

It describes the intentions of the European Commission concerning the establishment of bank resolution funds.

KEY POINTS

What is the role of bank resolution funds?

Resolution funds should contribute to financing the orderly resolution of distressed banks. In order to do this, they could implement measures such as:
financing bridge banks (i.e. institutions set up by a national regulator or central bank to operate a failed bank until a buyer can be found for its operations);
financing a total or partial transfer of assets and/or liabilities from the ailing entity;
financing a good bank/bad bank split.
Resolution funds may also be used to cover administrative costs, legal and advisory fees.
However, they must not play the role of insurance against failure or be used to bail-out failing banks.

How can bank resolution funds be financed?

The Commission considers that financing arrangements for a fund should procure the necessary resources whilst incentivising appropriate behaviour.

3 points could form the basis for calculating contributions to bank resolution funds:

banks’ assets could represent an indicator of the amount which might need to be spent in handling the bank’s resolution. Their assets are already subject to risk-weighted prudential capital requirements in the form of capital charges. A levy could be established based on the assets. However, this could therefore amount to an additional capital requirement and would have to be considered carefully in the context of the wider reforms to capital standards under way;
banks’ liabilities could also represent indicators of the amount which might need to be spent in handling the bank’s resolution. Costs of bank resolution are most likely to arise from the need to support certain liabilities (excluding equity and insured liabilities – e.g. deposits). However, liabilities could be less effective proxies for the degree of risk;
profits and bonuses could be used as a reference in order to determine the amount of levies

Financing arrangements should meet the following criteria:
avoid any possible arbitrage;
reflect the appropriate risks;
take into account the systemic nature of certain financial entities;
be based on the possible amounts that could be spent if resolution becomes necessary;

avoid competition distortions.
What means of governance should be used for bank resolution funds?

Bank resolution funds should remain separate from the national budget and be dedicated only to resolution costs.
The management of these funds should be entrusted to the authorities responsible for the resolution of financial entities acting as independent executive bodies.
The use of resolution funds should also respect the EU state aid rules.
The Commission intended to adopt legislative proposals for crisis management and resolution funds by early 2011.
How can bank resolution funds be integrated into a new financial stability framework?

The Commission proposed strengthening capital requirements and to reform financial supervision within the EU. It sought to strengthen deposit guarantee schemes and the corporate governance of financial institutions.
The Commission also sought to implement preventive measures in order to mitigate the risks of bank failures and to reduce the implicit guarantees associated with institutions deemed ‘too big to fail’.

The Commission also planned to adopt in October 2010 a roadmap on a European framework for crisis management. The aim of the proposed plan is to make common tools, which enable prompt and effective action to be taken in the event of banking failures, available to EU countries. These measures should not lead to costs for taxpayers.

Tools are proposed to complement the action of resolution funds:
recovery and resolution plans;
debt to equity conversions.

Defining a common approach to bank resolution funds

A European and global approach should be defined as regards the creation of bank resolution funds.
Under this new measure, national authorities will continue to be responsible for day-to-day supervision, and this should be underpinned by a solid intra-EU rules which is ready to address possible crises.

The first step in this common approach was to establish a system based on a harmonised network of national funds linked to a set of coordinated crisis management arrangements. This system was to be re-examined by 2014 with a view to creating EU integrated crisis management and supervisory arrangements, as well as an EU resolution fund in the longer term.

Developments since 2010

Following the publication of this communication, the European Commission issued a series of legislative proposals to address bank resolution. In 2014, the EU adopted:

Directive 2014/49/EU on deposit guarantee schemes to protect depositors of credit institutions.
Directive 2014/59/EU which lays down rules for the recovery and restructuring of credit institutions and investment firms.
Regulation (EU) No 806/2014 on the EU’s Single Resolution Mechanism and Single Resolution Fund. This sets out the rules and procedures for the resolution of failing banks and investment firms.

BACKGROUND

To mitigate the bank failures caused by the October 2008 financial crisis, EU countries’ governments provided state aid to assist the financial sector. This aid has considerably affected taxpayers and has increased EU countries’ public debt. The creation of resolution funds should prevent future recourse to state aid to resolve financial institutions’ failures.

DOCUMENTS

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the European Central Bank — Bank Resolution Funds (COM(2010) 254 final, 26.5.2010)

Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (recast) (OJ L 173, 12.6.2014, pp. 149-178)

Successive amendments to Directive 2014/49/EU have been incorporated in to the original document. This consolidated version is of documentary value only.

Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council (OJ L 173, 12.6.2014, pp. 190-348)

Reorganisation and winding-up of credit institutions

Directive 2001/24/EC — a single bankruptcy procedure for banks with branches in more than one EU country

It aims to ensure that, where a credit institution (generally a bank) with branches in other EU countries fails, a single bankruptcy procedure is applied to all creditors and investors.It entered into force on 5 May 2001. EU countries had to incorporate it in national law by 5 May 2004.

KEY POINTS

The directive:

— applies the principle of home country control. This means that the law of the EU country where the failed credit institution has its registered office applies to the entire bankruptcy proceedings;
— requires all relevant parties, including known creditors to be informed of the bankruptcy proceedings and re-organisation measures. This includes publication in the Official Journal of the European Union and at least 2 national newspapers in each host country (i.e. those in which the bank has its headquarters and its branches);
— provides that, as regards the winding-up proceedings, the applicable law is that of the home country. It should in particular cover such matters as:
— the respective powers of credit institutions and liquidators,
— the effects of the bankruptcy proceedings on any lawsuits brought by individual creditors, and
— the allocation of costs and expenses.
— clarifies the impact of the bankruptcy proceedings and applicable law in relation to certain contracts and other legal rights that may be affected by the proceedings such as employment contracts and property rights;
— requires all persons required to receive or divulge information in connection with the bankruptcy proceedings to guarantee professional secrecy.

Winding-up of credit institutions

Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 on the reorganisation and winding up of credit institutions (OJ L 125, 5.5.2001, pp. 15–23)

The successive amendments and corrections to Directive 2001/24/EC have been incorporated in to the original document. This consolidated version is of documentary value only.

Addressing troubled financial institutions’ problems

Directive 2014/59/EU — rules for the recovery and resolution of credit institutions and investment firms

Because many EU countries had to inject public money into their banking systems to rescue banks in the wake of the 2008 financial crisis, this act sets out new rules to deal with troubled institutions.
It aims to avoid ‘bail-outs’ that involve the use of taxpayers’ money in future cases of bank failure.

It establishes common European rules for the recovery and restructuring of failing banks.

Banks in difficulties — prevention

Each bank has to prepare a recovery plan which it submits to its national competent authority.
The national resolution authority has also to draw up a resolution plan in case recovery is not effective and restructuring (resolution) is necessary.
Both plans set out the actions to be taken in the event that a bank were to run into difficulties leading to its failure.

Banks in a difficult financial situation — early intervention

When a bank is in a difficult financial situation, the national competent authority has the power to intervene, such as by appointing a temporary administrator of the bank.

Failing banks — restructuring (resolution)

If the bank’s downward spiral continues, the national resolution authority has a variety of powers to minimise the cost to taxpayers of its failure. The most important power is to require the private sector to bear the costs first.

When a bank collapses, shareholders are first in line to cover the restructuring costs; then creditors would be asked to contribute, with those with non-guaranteed deposits (over €100,000) stepping in last.

The shareholders and creditors have to contribute to the losses of the failing institution; they cover the losses up to at least 8 % of the total liabilities (debts or obligations) of the bank undergoing a restructuring plan. If there are still losses to cover, the resolution fund (see below) can intervene. Other powers in the hands of national authorities include the possibility to sell the institution undergoing restructuring or merge it with another one.

National resolution funds to provide financial support for banks’ restructuring plans

Each EU country has to establish a national resolution fund financed in advance by credit institutions and investment firms established in its territory. This fund is to be used to finance the restructuring of a failing bank.

Between 2015 and 2017, the European Commission adopted a series of acts that supplement Directive 2014/59/EU. These include:

Regulation (EU) 2015/63 on
the calculation and the adjustment to the risk profile of institutions, of the contributions to be paid by banks to resolution funds
information that banks must provide so their contribution to a resolution fund can be calculated.

Regulation (EU) 2016/778 on
the circumstances and conditions under which the institution’s repayment contributions to a resolution fund may be partially or entirely postponed;
the criteria to determine the activities, services and operations with regard to the institution’s functions which are essential to the economy; and
criteria to determine the business lines and associated services with regard to core business lines.

Regulation (EU) 2016/911 on technical standards with regard to the form and the content of the description of group financial support agreements;
Regulation (EU) 2016/962 on technical standards with regard to the uniform formats, templates and definitions for the identification and transmission of information by competent authorities and resolution authorities to the European Banking Authority;
Regulation (EU) 2016/1075 on, among other things, standards for the content of recovery plans, resolution plans and group resolution plans;
Regulation (EU) 2016/1400 on the minimum elements of a business reorganisation plan and the minimum contents of the reports on its implementation;
Regulation (EU) 2016/1401 on standards for methodologies and principles on the valuation of liabilities arising from derivatives;
Regulation (EU) 2016/1450 on criteria relating to the methodology for setting the minimum requirement for own funds and eligible liabilities;
Regulation (EU) 2016/1066 on standards for presenting information for the purpose of resolution plans for credit institutions and investment firms;
Regulation (EU) 2016/1712 on standards for information on financial contracts;
Regulation (EU) 2017/867 on classes of arrangements to be protected in a partial property transfer.

In 2017, Directive 2014/59/EU was amended by Directive (EU) 2017/2399. It incorporates into EU law the G20 Total Loss-Absorbing Capacity (TLAC) standard. This standard ensures that if the global systemically important banks fail, they will have sufficient funds available for authorities to implement an orderly resolution that:

minimises the impact on financial stability,
ensures that core activities can be maintained, and
avoids exposing public funds to loss.
In 2018, Regulation (EU) 2018/308 was adopted. It lays down implementing technical standards for Directive 2014/59/EU with regard to formats, templates and definitions for the identification and transmission of information by resolution authorities for the purposes of informing the European Banking Authority of the minimum requirement for own funds and eligible liabilities.

DOCUMENTS

Successive amendments to Directive 2014/59/EU have been incorporated in the original text. This consolidated version is of documentary value only.

Commission Implementing Regulation (EU) 2018/308 of 1 March 2018 laying down implementing technical standards for Directive 2014/59/EU of the European Parliament and of the Council with regard to formats, templates and definitions for the identification and transmission of information by resolution authorities for the purposes of informing the European Banking Authority of the minimum requirement for own funds and eligible liabilities (OJ L 60, 2.3.2018, pp. 7-15)

Commission Delegated Regulation (EU) 2017/867 of 7 February 2017 on classes of arrangements to be protected in a partial property transfer under Article 76 of Directive 2014/59/EU of the European Parliament and of the Council (OJ L 131, 20.5.2017, pp. 15-19)

Commission Delegated Regulation (EU) 2016/1712 of 7 June 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms with regard to regulatory technical standards specifying a minimum set of the information on financial contracts that should be contained in the detailed records and the circumstances in which the requirement should be imposed (OJ L 258, 24.9.2016, pp. 1-7)

Commission Implementing Regulation (EU) 2016/1066 of 17 June 2016 laying down implementing technical standards with regard to procedures, standard forms and templates for the provision of information for the purpose of resolution plans for credit institutions and investment firms pursuant to Directive 2014/59/EU of the European Parliament and of the Council (OJ L 181, 6.7.2016, pp. 1-38)

Commission Delegated Regulation (EU) 2016/1450 of 23 May 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the criteria relating to the methodology for setting the minimum requirement for own funds and eligible liabilities (OJ L 237, 3.9.2016, pp. 1-9)

Commission Delegated Regulation (EU) 2016/1401 of 23 May 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms with regard to regulatory technical standards for methodologies and principles on the valuation of liabilities arising from derivatives (OJ L 228, 23.8.2016, pp. 7-15)

Commission Delegated Regulation (EU) 2016/1400 of 10 May 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the minimum elements of a business reorganisation plan and the minimum contents of the reports on the progress in the implementation of the plan (OJ L 228, 23.8.2016, pp. 1-6)

Commission Delegated Regulation (EU) 2016/1075 of 23 March 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the content of recovery plans, resolution plans and group resolution plans, the minimum criteria that the competent authority is to assess as regards recovery plans and group recovery plans, the conditions for group financial support, the requirements for independent valuers, the contractual recognition of write-down and conversion powers, the procedures and contents of notification requirements and of notice of suspension and the operational functioning of the resolution colleges (OJ L 184, 8.7.2016, pp. 1-71)

Commission Implementing Regulation (EU) 2016/962 of 16 June 2016 laying down implementing technical standards with regard to the uniform formats, templates and definitions for the identification and transmission of information by competent authorities and resolution authorities to the European Banking Authority according to Directive 2014/59/EU of the European Parliament and of the Council (OJ L 160, 17.6.2016, pp. 35-49)

Commission Implementing Regulation (EU) 2016/911 of 9 June 2016 laying down implementing technical standards with regard to the form and the content of the description of group financial support agreements in accordance with Directive 2014/59/EU of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms (OJ L 153, 10.6.2016, pp. 25-27)

Commission Delegated Regulation (EU) 2016/778 of 2 February 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to the circumstances and conditions under which the payment of extraordinary ex post contributions may be partially or entirely deferred, and on the criteria for the determination of the activities, services and operations with regard to critical functions, and for the determination of the business lines and associated services with regard to core business lines (OJ L 131, 20.5.2016, pp. 41-47)

Commission Delegated Regulation (EU) 2015/63 of 21 October 2014 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to ex ante contributions to resolution financing arrangements (OJ L 11, 17.1.2015, pp. 44-64)

Failing banks and investment firms: rules and procedures

Regulation (EU) No 806/2014 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

Regulation (EU) 2019/877 amending Regulation (EU) No 806/2014 as regards the loss-absorbing and recapitalisation capacity of credit institutions and investment firms

Regulation (EU) No 806/2014 sets out the structure of the Single Resolution Board (SRB). It is made up of a chair, a vice-chair, 4 permanent members and the authorities from all participating EU countries. It operates in:
executive sessions: the chair, 4 further independent full-time members, 2 permanent observers appointed by the European Commission and by the European Central Bank (ECB) and, in specific cases, representatives of national resolution authorities of participating countries or other observers; and
plenary sessions: the full board, as above, and representatives of all national resolution authorities of participating countries.
It introduces uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms through a single resolution mechanism and the use of a single resolution fund.
While the regulation applies to euro area countries, other EU countries are also allowed to participate.
Regulation (EU) 2019/877 amends the original regulation to incorporate in EU legislation international standards on loss-absorption and recapitalisation for banks set by the Financial Stability Board.

The Single Resolution Board

When a bank is deemed to be in a crisis situation, the board may put together a resolution scheme that is passed on to the Commission for formal approval. If the Commission has no objections, the scheme should be adopted within 24 hours. In some specific cases, the Commission can request the Council to approve its amendments to the scheme.

A resolution scheme of less than €5 billion from the single resolution fund is decided in executive session board meetings, which only include the national resolution authority from the EU country where the bank in crisis is located.
When more than €5 billion is needed, decisions are taken by the plenary session.

The single resolution fund

Funded by banks from 2016 onwards, the single resolution fund should amount to 1% of insured deposits in all participating EU countries (for a total of around €55 billion) in 2024. Along with Regulation (EU) No 806/2014, an intergovernmental agreement was signed between participating EU countries. This allows for:
the transfer of banks’ contributions to national compartments of the fund; and
the progressive mutualisation* of those contributions in the fund.

Single resolution mechanism

Together, the SRB and the single resolution fund make up the single resolution mechanism. This system and the single supervisory mechanism, that gives supervisory powers to the ECB, are the foundations of the EU’s banking union, which applies to euro area countries. Other EU countries may also participate.

Banks covered

The SRB is responsible for the resolution of all banks that are supervised by the ECB. As in the case of the single supervisory mechanism, the SRB is directly responsible for the largest banks that are directly supervised by the ECB and for other cross-border banks.
Other banks remain under the direct responsibility of their national resolution authorities. However, they remain under the indirect responsibility of the SRB, and the SRB may step in if their resolution scheme requires the use of the single resolution fund.

Calculation of individual institutions’ contributions

Regulation (EU) 2015/81 lays down rules relating to the obligation of the SRB to calculate the contributions for individual institutions and the methodology for their calculation.

Loss-absorbing and recapitalisation capacity of credit institutions and investment firms

In incorporating international standards on loss absorption and recapitalisation into EU law for global systemically important banks and amending the existing rules for other banks, Regulation (EU) 2019/877 provides for the rules for banks to deal with losses by ensuring that they hold enough capital and other liabilities to minimise as much as possible any taxpayer bail-outs.

DOCUMENTS

Regulation (EU) No 806/2014 of the European Parliament and of the Council 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 (OJ L 225, 30.7.2014, pp. 1-90)Regulation (EU) No 806/2014 has applied since 1 January 2016. However, some rules, such as the start of the board’s activities, have applied since 1 January 2015.
Regulation (EU) 2019/877 applies from 28 December 2020

Regulation (EU) 2019/877 of the European Parliament and of the Council of 20 May 2019 amending Regulation (EU) No 806/2014 as regards the loss-absorbing and recapitalisation capacity of credit institutions and investment firms (OJ L 150, 7.6.2019, pp. 226-252)

Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, pp. 63-89)

Regulation (EU) No 1022/2013 of the European Parliament and of the Council of 22 October 2013 amending Regulation (EU) No 1093/2010 establishing a European Supervisory Authority (European Banking Authority) as regards the conferral of specific tasks on the European Central Bank pursuant to Council Regulation (EU) No 1024/2013 (OJ L 287, 29.10.2013, pp. 5-14)

Council Implementing Regulation (EU) 2015/81 of 19 December 2014 specifying uniform conditions of application of Regulation (EU) No 806/2014 of the European Parliament and of the Council with regard to ex ante contributions to the Single Resolution Fund (OJ L 15, 22.1.2015, pp. 1-7)

Addressing troubled financial institutions’ problems

Directive 2014/59/EU — rules for the recovery and resolution of credit institutions and investment firms

Banks in difficulties — prevention

Banks in a difficult financial situation — early intervention

When a bank is in a difficult financial situation, the national competent authority has the power to intervene, such as by appointing a temporary administrator of the bank.

Failing banks — restructuring (resolution)

This ‘bail-in’ mechanism, which marks a change of tack compared to the public ‘bail-out’ tool, entered into force, at the latest, in January 2016. EU countries could already decide to incorporate the bail-in tool into their legal systems before that date.
When a bank collapses, shareholders are first in line to cover the restructuring costs; then creditors would be asked to contribute, with those with non-guaranteed deposits (over €100,000) stepping in last.

National resolution funds to provide financial support for banks’ restructuring plans

Between 2015 and 2017, the European Commission adopted a series of acts that supplement Directive 2014/59/EU. These include:

This standard ensures that if the global systemically important banks fail, they will have sufficient funds available for authorities to implement an orderly resolution that:

minimises the impact on financial stability,
ensures that core activities can be maintained, and
avoids exposing public funds to loss.

In 2018, Regulation (EU) 2018/308 was adopted. It lays down implementing technical standards for Directive 2014/59/EU with regard to formats, templates and definitions for the identification and transmission of information by resolution authorities for the purposes of informing the European Banking Authority of the minimum requirement for own funds and eligible liabilities.

DOCUMENTS

Successive amendments to Directive 2014/59/EU have been incorporated in the original text. This consolidated version is of documentary value only.

Crisis management in the financial sector

Communication (COM(2010) 579 final) — an EU Framework for Crisis Management in the Financial Sector

It sets out the steps to be taken to equip the European Union (EU) with a set of rules for crisis management in the financial sector.

Scope

The set of rules for crisis management in the financial sector concerns:

all credit institutions;
certain investment firms, more particularly those whose failure might put the financial system at risk.

Objectives

The aim of these rules is to ensure that the financial system is stable, even in the event of a business failure, and to:

encourage prevention and preparation to reduce risks in the financial system;
prepare credible resolution tools;
implement fast and effective means to act;
reduce moral hazard by ensuring shareholders contribute to costs;
contribute to a smooth resolution of cross-border groups to preserve the internal market;
ensure legal certainty;
limit competitive distortions.

Areas of action

The communication identified measures that should be taken in the following areas:

authorities responsible for crisis management — each EU country must designate a resolution authority that is independent from the supervisor;
preparatory and preventative measures — including the implementation of a supervisory programme for each supervised institution and on-site supervisory examinations;
triggers — early intervention should be put in place in case a bank or investment firm cannot satisfy the requirements of the Capital Requirements Directive;
early intervention — provides for the widening and clarifying of supervisors’ powers. Banks and businesses would be obliged to present a plan enabling the institution to recover in the event of financial difficulties;
debt write-down — allowing an institution in difficulty to continue its activities or to cease some of them in order to limit risks of ‘contagion’ to other institutions;
resolution — reform legislation on bank insolvency in order that failing banks may benefit from liquidation proceedings.

Supervisory authorities

European supervisory authorities were established in 2011:

the European Banking Authority (EBA), which deals with bank supervision, including the supervision of the recapitalisation of banks;
the European Securities and Markets Authority (ESMA), which deals with the supervision of capital markets and carries out direct supervision with regard to credit rating agencies and trade repositories; and
the European Insurance and Occupational Pensions Authority (EIOPA), which deals with insurance supervision.

The 28 national supervisors are represented in all 3 supervising authorities.

A European Systemic Risk Board was established to monitor and assess potential threats to financial stability that arise from macro-economic developments and from developments within the financial system as a whole.

Bank Recovery and Resolution Directive

This directive (Directive 2014/59/EU) entered into force in all EU countries in July 2014. It sets out a number of rules to harmonise and improve the tools for dealing with bank crises across the EU, including:

banks are required to prepare recovery plans to overcome financial distress;
authorities are granted a set of powers to intervene in the operations of banks to avoid their failure;
authorities also have powers to implement plans to resolve failed banks in a way that preserves their most critical functions and avoids taxpayers having to bail them out;
a Single Resolution Fund for countries in the euro area was established in 2016; separate national funds remain in place for those EU countries outside the area;
procedures to improve cooperation between national authorities.

Deposit Guarantee Schemes (DGSs) Directive

This directive (Directive 2014/49/EU) entered into force in 2014. It strengthens the existing system of national DGS to respond to the weaknesses revealed by the financial crisis. Its key elements include:

universal guarantee of deposits up to €100,000;
easier and faster access to repayment — a gradual reduction in payment deadlines from 20 working days to 7 working days;
more robust financing regime;
better information for depositors.

Crisis management’ on the European Commission’s website
European Commission press release ‘A comprehensive EU response to the financial crisis: substantial progress towards a strong financial framework for Europe and a banking union for the eurozone’.

DOCUMENTS

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank — An EU Framework for Crisis Management in the Financial Sector (COM(2010) 579 final, 20.10.2010)

Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (OJ L 173, 12.6.2014, pp. 149–178)

Successive amendments to Directive 2014/49/EU have been incorporated in the original text. This consolidated version is of documentary value only.

Failing banks and investment firms: rules and procedures

Regulation (EU) 2019/877 amending Regulation (EU) No 806/2014 as regards the loss-absorbing and recapitalisation capacity of credit institutions and investment firms

The Single Resolution Board

The single resolution fund

Single resolution mechanism

Banks covered

Other banks remain under the direct responsibility of their national resolution authorities. However, they remain under the indirect responsibility of the SRB, and the SRB may step in if their resolution scheme requires the use of the single resolution fund.

Calculation of individual institutions’ contributions

Regulation (EU) 2015/81 lays down rules relating to the obligation of the SRB to calculate the contributions for individual institutions and the methodology for their calculation.

Loss-absorbing and recapitalisation capacity of credit institutions and investment firms

Regulation (EU) No 806/2014 has applied since 1 January 2016. However, some rules, such as the start of the board’s activities, have applied since 1 January 2015.
Regulation (EU) 2019/877 applies from 28 December 2020.