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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

Appeal proceedings

Decisions of the SRB may be challenged before the Appeal Panel of the SRB or before the Court of Justice of the European Union.

Before the Appeal Panel

Which decisions?
The competence of the Appeal Panel is determined by Article 85(3) of the SRM Regulation. Only the decisions of the SRB referred to in...

Who may appeal?
Any natural or legal person, including authorities, when the SRB decision is addressed to that person...

Before the Court of Justice of the European Union

Which decisions?
All decisions of the SRB that are not appealable before the Appeal Panel, pursuant to...

Who may appeal?
Member States and the Union institutions, as well as any natural or legal person, when the SRB decision is addressed to that person...