SRB publishes guidance on bank mergers and acquisitions

The Single Resolution Board today publishes a paper outlining its expectations for how banks engaging in mergers and acquisitions (M&As) can ensure resolvability. Such transactions, in addition to prudential and competition law implications, are highly likely to have consequences for banks’ resolvability. Ultimately, well-designed and well-executed transactions may enhance banks’ resilience and profitability and strengthen their resolvability.

The SRB works closely with banking supervisors on all such transactions, to ensure proportionality and avoid duplication of efforts. As laid out in the SRB’s Expectations for Banks (EfB) policy[i], any bank engaging in M&As or other corporate transactions should contact the SRB to detail their intentions. This allows the SRB to detect any resolvability concerns on time.

This publication provides greater detail to banks on the information the SRB may need as such cases progress. It also gives insights into the potential effects on resolvability in selected areas, such as loss-absorption and recapitalisation capacity, information systems, operational continuity and access to FMI services and legal structure.

“Well-designed bank mergers and acquisitions can strengthen resolvability. This guidance brings greater clarity to how banks and the SRB can best work together to achieve this.” – Elke König, Chair of the SRB.

[i] Principle 1.2 of the SRB Expectations for banks (EfB).

 

About the Single Resolution Board

The Single Resolution Board (SRB) is the central resolution authority within the Banking Union, which at present is 19 eurozone countries, Bulgaria and Croatia. Together with the national resolution authorities it forms the Single Resolution Mechanism. The SRB works closely with the European Commission, the European Central Bank, the European Banking Authority and national authorities. Its mission is to ensure an orderly resolution of failing banks, protecting the taxpayer from state bail-outs, which is promoting financial stability.

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