The Single Resolution Mechanism
Produced in partnership with DLA Piper UK LLP
The Single Resolution Mechanism

The following Financial Services guidance note Produced in partnership with DLA Piper UK LLP provides comprehensive and up to date legal information covering:

  • The Single Resolution Mechanism
  • Background
  • Application and scope
  • Timeframe
  • Single Resolution Board
  • Single Resolution Fund
  • Resolution under the SRM
  • Revision of the SRM Regulation
  • Institutions established in non-participating Member States and third countries

Background

The financial and economic crisis highlighted the increasing risk of financial fragmentation within the internal market for banking services in the European Union (EU). To address this concern, the EU has established a European Banking Union, which is underpinned by a single rulebook for financial services for the internal market as a whole. This further integrates the banking systems of the EU, with the aim of ensuring the stability and integrity of the EU internal market.

As part of the European Banking Union, the EU has established a Single Supervisory Mechanism (SSM) (established by Council Regulation (EU) 1024/2013, the 'SSM Regulation') which harmonised the supervision of credit institutions across the internal market.

All banks supervised under the SSM will also participate in the Single Resolution Mechanism (SRM) (established by Council Regulation (EU) 806/2014, the 'SRM Regulation'). The SRM is an integral part of harmonising the resolution regime established by the Bank Recovery and Resolution Directive 2014/59/EU (BRRD) in Member States participating in the SSM (ie all Member States in the Euro-zone and those non-Euro area Member States who have opted to participate in the SSM). The SRM aims to ensure that a bank failure does not harm the broader economy or cause financial instability, by ensuring an orderly resolution of failing banks with minimal costs for taxpayers and to the