Commission proposes Single Resolution Mechanism for the Banking Union
EU News 335/2013
Brussels, 10 July 2013
The European Commission has today proposed a Single Resolution Mechanism (SRM) for the Banking Union. The mechanism would complement the Single Supervisory Mechanism (SSM) (IP/12/953) which, once operational in late 2014, will see the European Central Bank (ECB) directly supervise banks in the euro area and in other Member States which decide to join the Banking Union. The Single Resolution Mechanism would ensure that – not withstanding stronger supervision - if a bank subject to the SSM faced serious difficulties, its resolution could be managed efficiently with minimal costs to taxpayers and the real economy.
The reinforced supervisory framework of the SSM, as well as enhanced prudential requirements (see MEMO/13/272), will bolster the safety of banks. However, the risk of a bank experiencing a severe liquidity or solvency problem can never be totally excluded. Bank supervision and resolution need to be aligned and exercised at the same central level in order to curb uncertainty and prevent bank runs and contagion to other parts of the euro area.
Source and additional information:
Michel Barnier Date: 10/07/2013 Reference: P-023720/00-16 Location: Brussels - EC/Berlaymont (C)EU, 2013 URL