Banking Union – Single Resolution Board collects €7.5 billion in annual ex-ante contributions to the Single Resolution Fund, now reaching €24.9 billion in total

As of 30 June 2018, the Single Resolution Board (SRB) had collected €7.5 billion from 3,315 institutions in annual ex-ante contributions to the Single Resolution Fund (SRF). In total, the SRF now holds an amount of €24.9 billion.

 

The target size of the SRF is intended to be at least 1% of covered deposits by end 2023. The SRF pools contributions 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 based on the methodology set out in the regulations and are collected via the National Resolution Authorities (NRAs). The SRF is being built-up over a period of eight years (2016-2023).

The SRF is gradually being built up and will ensure that the SRB can apply its resolution tools effectively and efficiently; as covered deposits are rising, so are the contributions to the SRF for 2018”.  - Elke König, Chair of the Single Resolution Board

 

Background:

The Single Resolution Fund:

  • was established by the SRM Regulation (EU) No 806/2014 and is owned by the Single Resolution Board (SRB).
  • 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;

 

Use of the SRF:

Within a 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.

 

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.

Media Contact details:

Camille De Rede

E-mail: Camille.De-Rede@srb.europa.eu

Phone number: +32 2 490 3530

Switchboard: +32 2 490 3000

Mobile phone: +32 460 766 704

E-mail:  Sean.DE-BURCA@srb.europa.eu

Phone number: +3224903710

Switchboard: +32 2 490 3000

Mobile phone: +32477028710

Website: https://srb.europa.eu/

Twitter: @EU_SRB

 

Contact the Single Resolution Board

Treurenberg 22, 1049 Brussels
Belgium

+32 (0) 2 490 30 00