Single Resolution Mechanism

Regulation 806/2014
History
European Union regulation
Title	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
Applicability	All EU members. SRM provisions however only apply to Member States participating in the SSM.
Made by	European Parliament and Council
Made under	of the TFEU.
Journal reference	L225, 30.07.2014, p.1
Date made	15 July 2014
Came into force	19 August 2014
Applies from	Applies 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, shall 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, shall 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, shall apply from 1 January 2015 (2015-01-01).
Other legislation
Amends	Regulation (EU) No 1093/2010
Current legislation

Agreement on the transfer and mutualisation of contributions to the Single Resolution Fund

Type	Intergovernmental agreement
Signed	21 May 2014 (2014-05-21)
Location	Brussels, Belgium
Effective	1 January 2016
Condition	Entry 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
Signatories	26 EU member states (all except Sweden and the United Kingdom) including all 19 eurozone states
Ratifiers	20 / 26
Depositary	General Secretariat of the Council

Applies 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.

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 a strong Single Resolution Board 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. 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.

The SRM was enacted through a Regulation and an Intergovernmental Agreement (IGA) which are titled:

The proposed Regulation was put forward by the European Commission in July 2013 to compliment the other pillars of the EU banking union, the Single Supervisory Mechanism (SSM). The details of some aspects of the functioning of the SRF, including the transfer and mutualisation of funds from national authorities to the centralized fund, was split off from the Regulation into the IGA due to concerns, especially by Germany, that they were incompatible with current EU treaties.

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