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Simpler rules are easier to understand and comply with. We see several potential paths to achieve this, but first and foremost, completing the Banking Union, as part of the Savings and Investment Union, would have the biggest impact on both simplicity and...

Preparing for banks’ failure is no simple feat, and it is not cheap. But not doing so costs more. 

The lesson from the great financial crisis is clear. Between 2008 and 2017, the EU saw public aid to financial firms of more than 1.4 trillion euro (capital...

Managing the Single Resolution Fund (SRF) involves balancing two critical objectives: safeguarding the fund’s value through prudent investment, while ensuring high liquidity so that funds can be accessed at short notice during a resolution. This dual...

In times of uncertainty - whether triggered by geopolitical instability, or economic downturns - confidence in the financial system becomes more than a desirable feature; it becomes essential. In this blog post, I’m going to look at the role of one of the...

Smaller banks, also known as less significant institutions (LSIs) in the Banking Union, play an important role in the financial ecosystem. They provide essential services that support local economies and communities such as payment services, deposit...

The bail-in tool was introduced in the EU as a response to government bail-outs during the great financial crisis of 2008-2009. The concept is that, rather than the taxpayer, owners and creditors of banks bear losses and, if necessary, recapitalise the...

Banks’ trading activities can carry a substantial part of their total risk and be a channel of contagion in bank crises. A keen understanding of what’s in trading books and of how to wind them down post resolution while staying solvent is key for a...

The EU has put in place robust rules for bank supervision and crisis management, including a strong resolution framework. We’ve seen these pay off, in terms of how the European banking sector has coped with a series of crises. The rules also ensured the...

During the recent economic shocks caused by the Covid-19 pandemic and the more recent inflation surge, the EU banking system proved resilient and continued to provide lending to the real economy. In addition to the support provided to the economy by the...

As the SRB enters phase two of its existence, SRB Chair Dominique Laboureix shares his reasons for launching a strategic review of how the SRB works, which will feed into a new plan for Europe’s central, independent resolution authority.

Two months ago...

It is now a decade since the Liikanen Report was published. While the proposal for structural reform in the banking sector was not implemented in the EU, many of the ideas brought forward by the high-level expert group can be found in other regulatory...

Euro area banks have emerged from the pandemic largely unscathed, mainly due to the unprecedented support from governments, central banks, regulators and supervisors. Bank capital in the form of Common Equity Tier 1 even increased throughout the pandemic...

Each year, we collect contributions to build up the Single Resolution Fund (SRF), an emergency crisis fund that supports bank resolution. Around 3,000 banks and other financial institutions, across the 21 EU countries that make up the Banking Union, will...

The SRB is continuously enhancing its approach to the public interest assessment (PIA). This is the main policy tool used to assess whether a failing bank should be resolved in the public interest, or whether it can be liquidated under normal insolvency...

The dawn of the New Year is not the only time that we at the SRB think about resolutions – we do that every day of the year! Our focus is always on making banks resolvable so that we can promote financial stability and protect the taxpayer. However, the...

The SRB’s role is to develop resolution plans that are ready for action at very short notice, for the banks under our remit. If a bank should fail, our goal is to make sure that happens in an organised and orderly way. We make sure that any critical roles...

From the Finnish national resolution authority’s viewpoint, the BRRD offers us strong yet flexible tools to prepare for crisis management in our local banking market. Thanks to the Banking Union (BU), the SRB provides us with skilled professionals and...

The European Banking Union still awaits completion, with more work urgently needed to move towards a fully integrated system that delivers better crisis management, depositor protection and a stronger banking sector.

The European Commission has recently...

Making banks resolvable remains the SRB’s key priority [1]. Banks entered the Covid-19 crisis in a much better shape than during the 2008 financial crisis, and were instrumental for financing the economy. However, the pandemic also reminded stakeholders...

In a severe banking crisis, the question of what to do with impaired assets is often raised. The most straightforward option, of selling the assets at a low price in a fire sale, can trigger an unnecessary destruction of value, with the banking framework...

The public interest assessment is a key safeguard in bank resolution, to protect taxpayers and financial stability. When faced with a failing bank, the SRB considers whether resolution best serves the public interest or whether the bank can go into normal...

Resolution planning has come a long way since the financial crisis 2007/08 and is now firmly rooted in the Banking Union’s regulatory framework. Preserving financial stability in all 21 Banking Union Member States and beyond is key[1], and this guides the...

There is no doubt that 2020 was a milestone year in many people’s lives. At the SRB, 2020 also saw us hit two major milestones from a resolution planning perspective.

The first of these was the introduction of a new resolution planning cycle (RPC) based...

We ended 2020 with agreement on another important step on the road to the Banking Union.

The Eurogroup (in inclusive format) agreed to move forward with the reform of the European Stability Mechanism and to establish the common backstop to the Single...