Document Type
Case Study
Case Series
European Banking Union
JEL Codes
G01, G28
Abstract
The options available to European governments to respond to a multinational bank in financial trouble have been severely limited since each country has its own unique laws and authority applicable to banks operating within its borders. The Bank Recovery & Resolution Directive (BRRD), which was adopted in 2013 and scheduled to go into effect January 2015, harmonizes rules across EU countries for how to restructure and resolve failing banks. However, the directive would maintain the existing system of individual national resolution authorities and resolution funds. To better secure the Eurozone banks and to compliment the Single Supervisory Mechanism, which was enacted in April 2014, the European Parliament approved the Single Resolution Mechanism (SRM). The SRM establishes a Single Resolution Board and a single Resolution Fund that will handle bank failures in all EU countries participating in the SSM. This case reviews the changes in Eurozone bank resolution resulting from the BRRD and the SRM.
Recommended Citation
Wiggins, Rosalind Z.; Wedow, Michael; and Metrick, Andrew
(2019)
"European Banking Union B: The Single Resolution Mechanism,"
Journal of Financial Crises: Vol. 1
:
Iss. 3, 130-149.
Available at:
https://elischolar.library.yale.edu/journal-of-financial-crises/vol1/iss3/8
Date Revised
2019-11-11
Included in
Banking and Finance Law Commons, Bankruptcy Law Commons, Economic Policy Commons, European Law Commons, International Economics Commons, International Relations Commons, Macroeconomics Commons, Policy History, Theory, and Methods Commons, Political Economy Commons