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The Single Resolution Mechanism (SRM) and the Single Resolution Fund (SRF): A Comprehensive Review of the Second Main Pillar of the European Banking Union (THIRD EDITION)

217 Pages Posted: 6 Oct 2015 Last revised: 21 Aug 2017

Christos Gortsos

National and Kapodistrian University of Athens

Date Written: July 31, 2017

Abstract

The third edition of the present study contains a full update of the framework governing the Single Resolution Mechanism and the Single Resolution Fund since 1 January 2016, with due reference also to decisions taken in 2017 by the Single Resolution Board. The cut-off date is 31 July 2017.

Even though the structure of the study is almost identical to that of the second edition, Sub-section 1 of Section A, Sub-section 1 of Section C, Sub-section 2 of Section D and the concluding remarks have been considerably extended. Additional secondary sources have also been added, as appropriate.

This study aims to provide a systematic and comprehensive review of the provisions of the legal acts which are the sources of the EU Single Resolution Mechanism (‘SRM’) and the EU Single Resolution Fund (‘SRF’) that constitute the second main pillar of the European Banking Union (‘EBU’).

It is structured in six (6) Sections:

(1) Section A reviews the main provisions of the SRM Regulation (‘SRMR’) (under 2) and of the SRF Agreement (under 3), within the framework of the legal acts which constitute the sources of the EBU (under 1).

(2) Section B provides a general overview of this new institutional framework, focusing on the various aspects of the Single Resolution Board (‘SRB’): its legal status, seat and composition, its administrative and management structure, the Appeal Panel, the independence and accountability regime, aspects of liability, and all other relevant provisions (under 1-7, respectively).

(3) Section C deals with the provisions of the SRMR on resolution planning (under 1), with particular emphasis on those pertaining to the minimum requirement for own funds and eligible liabilities (MREL) (under 2) and to early intervention (under 3).

(4) The resolution regime under the SRM Regulation is presented in Section D. This Section examines: the objectives and principles of resolution, the resolution procedure, the provisions on write-down and conversion of relevant capital instruments, the framework governing the resolution tools, the cooperation arrangements, as well as the investigatory powers of the Board and its power to impose penalties (under 1-6, resp.).

(5) Section E deals with the SRF, and in particular with: its constitution, administration, investments, and use under the SRM Regulation (under 1), and the specific provisions of the SRF Agreement (under 2).

(6) Finally, Section F contains the concluding remarks of the study.

Keywords: European Banking Union, resolution of credit institutions, Single Resolution Mechanism (SRM), Single Resolution Board (SRB), Single Resolution Fund (SRF), MREL, TLAC, Banco Popular Espaρol, V&V

JEL Classification: G21, G28, G33, K23, K33, N20

Suggested Citation

Gortsos, Christos, The Single Resolution Mechanism (SRM) and the Single Resolution Fund (SRF): A Comprehensive Review of the Second Main Pillar of the European Banking Union (THIRD EDITION) (July 31, 2017). Available at SSRN: https://ssrn.com/abstract=2668653 or http://dx.doi.org/10.2139/ssrn.2668653

Christos Gortsos (Contact Author)

National and Kapodistrian University of Athens ( email )

Akadimias 45
Athens, 10672
Greece

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