Press Release - Banking Union - Single Resolution Board collects €6.6 billion in annual contributions to the Single Resolution Fund, now reaching €17 billion in total
As of 30 June 2017, the Single Resolution Board (SRB) had collected €6.6 billion from 3,512 institutions in annual contributions to the Single Resolution Fund (SRF). In total, the SRF now holds an amount of €17.4 billion.
The SRF pools contributions which are raised on an annual basis at national level from credit institutions and certain investment firms within the 19 participating Member States. These contributions are calculated on the basis of the methodology set out in the Commission Delegated Regulation (EU) 2015/63 and Council Implementing Regulation (EU) 2015/81 and are collected via the National Resolution Authorities (NRAs).
The SRF is being built-up over a period of eight years (2016-2023). The target size is intended to be at least 1% of covered deposits by end 2023. 3,512 institutions banks and investment firms have to contribute to the Fund.
“The Single Resolution Fund ensures uniform practice in the financing of resolutions within the Single Resolution Mechanism. It is an important safeguard that can be accessed as last resort only. In addition we have Loan Facility Agreements with all Member States in place and are supporting the efforts of Member States to put in place an effective common backstop.” - Elke König, Chair of the Single Resolution Board
The Single Resolution Fund:
- ensures uniform practice in the financing of resolutions within the Single Resolution Mechanism (SRM);
- pools contributions raised at national level from institutions within the SRB’s remit in each of the 19 Member States within the Banking Union;
- is built up over eight years (2016-2023) to reach the target level of at least 1% of covered deposits of all credit institutions authorised in the participating Member States;
- was established by the SRM Regulation (EU) No 806/2014 and is owned by the Single Resolution Board (SRB).
Use of the SRF:
Within the resolution scheme, the SRF may be used only to the extent necessary to ensure the effective application of the resolution tools, as a last resort, inter alia:
- to guarantee the assets or liabilities of the institution under resolution;
- to make loans to, or to purchase assets of, the institution under resolution;
- to purchase assets of the institution under resolution;
- to make contributions to a bridge institution and an asset management vehicle;
- to pay compensation to shareholders or creditors who incurred greater losses than under normal insolvency proceedings and;
- to make a contribution to the institution under resolution in lieu of the write-down or conversion of liabilities of certain creditors under specific conditions.
The SRF shall not be used directly to absorb losses or to recapitalise an institution. In exceptional circumstances, where an eligible liability or class of liabilities is excluded or partially excluded from bail-in, a contribution from the SRF may be made to the institution under resolution under two key conditions, namely:
- Bail-in of at least 8%: a contribution to loss absorption and recapitalisation totalling not less than 8% of the total liabilities including own funds of the institution under resolution has already been made by shareholders, the holders of relevant capital instruments and other eligible liabilities through write-down, conversion or otherwise
- Contribution from the SRF of maximum 5%: the SRF contribution does not exceed 5% of the total liabilities including own funds of the institution under resolution.
- Read more information about the Single Resolution Fund
- BANK RECOVERY AND RESOLUTION DIRECTIVE (BRRD) 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
- SINGLE RESOLUTION MECHANISM REGULATION (SRMR) (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
- European Commission Delegated Regulation (EU) 2015/63 and Council Implementing Regulation (EU) 2015/81.
About the Single Resolution Board
The Single Resolution Board (SRB) is the central resolution authority within the Banking Union (BU). Together with the NRAs of participating Member States it forms the Single Resolution Mechanism (SRM). The SRB works closely with the European Commission (EC), the European Central Bank (ECB), the European Banking Authority (EBA) and national competent authorities (NCAs). Its mission is to ensure an orderly resolution of failing banks with minimum impact on the real economy and public finances of the participating Member States and beyond.
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