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Cases

When does a bank resolution occur?

A bank resolution occurs when authorities determine that a failing bank cannot go through normal insolvency proceedings without harming public interest and causing financial instability.

To manage the bank's failure in an orderly manner, authorities use resolution tools that:

  • ensure continuity of the bank's critical functions
  • maintain financial stability
  • restore the viability of parts or all of the bank

 Meanwhile, any part of the bank that cannot be made viable again goes through normal insolvency proceedings.

After the recent financial crisis, the EU adopted a number of measures to harmonise and improve the tools for dealing with bank crises in its member countries.

The resolution of a bank occurs when the authorities determine that:

  • the bank is failing or likely to fail (FOLTF);
  • there are no supervisory or private sector measures that can restore the bank to viability within a short timeframe (for example, by taking actions set out in the bank’s recovery plan); and
  • resolution is necessary in the public interest, i.e. the resolution objectives would not be met to the same extent if the bank were wound up under normal (national) insolvency proceedings

Subsequently, the SRB announces the adoption of:

  • its decisions to adopt a resolution scheme; and
  • its decisions not to take resolution action.

In the individual site for each decision, the SRB publishes a press release, a notice summarizing the effects of its decisions in accordance with Article 29(5) SRMR and a non-confidential version of its decision.

The Institutions and the Agencies of the European Union are subject to strict requirements of professional secrecy and confidentiality. Therefore, pursuant to the EU legal framework, the SRB shall ensure that the published information does not contain confidential information received in connection with its functions, in particular, by assessing the effects that the disclosure could have on the commercial interests of the relevant entities and on the public interest. 

Cases overview

Resolution cases

Banco Popular

 

Brussels – 7 June 2017

Today, the Single Resolution Board (SRB) has transferred all shares and capital instruments of Banco Popular Español S.A. (Banco Popular) to Banco Santander S.A ...

Non-resolution cases

PNB

Following the European Central Bank’s assessment of AS PNB Banka as failing or likely to fail, the Single Resolution Board has today decided that resolution action is not necessary. The Latvian bank...

Banca Popolare di Vicenza and Veneto Banca

 

Brussels – 23 June 2017

Following today’s decision taken by the European Central Bank to declare Banca Popolare di Vicenza S.p.A. and Veneto Banca S.p.A. as ‘failing or likely to fail’...

ABLV

Following the decision by the European Central Bank to declare ABLV Bank, AS and its subsidiary ABLV Bank Luxembourg S.A. as ‘failing or likely to fail’, the Single Resolution Board (SRB) has decided...