The Single Resolution Mechanism (‘SRM’) is a system involving the European Central Bank (‘ECB’), European Commission, a new Single Resolution Board (‘SRB’), and national resolution authorities for deciding how and when to resolve a failing bank.
The SRM will apply the rules from the recently adopted (Bank) Recovery and Resolution Directive (‘BRRD’) in those states to which the earlier Single Supervisory Mechanism (‘SSM’) applies –in practice, this will be the Eurozone. The SRM will also guard and grant access to a Single Resolution Fund which will (ultimately) be pooled across all the SSM-participating Member States.
After early controversy between the Parliament, Commission and Council over who will get to ‘pull the trigger’ on a resolution decision, the Regulation establishing the SRM was finally agreed on 20 March 2014 and adopted by the European Parliament on 15 April 2014.
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