SRB - Single Resolution Board

The Single Resolution Board (SRB) is the European Union’s central authority for the orderly resolution of failing banks within the Banking Union. Established in 2015, the SRB ensures that when banks collapse, they do so without triggering systemic crises or relying on taxpayer-funded bailouts. It is a key pillar of Europe’s post-crisis financial architecture, promoting stability, confidence, and accountability in the EU banking system.

Mission & Objectives

The SRB’s mission is to manage the resolution of significant and cross-border banks in the euro area. Its ultimate objective: protect financial stability while minimizing public cost and preserving critical banking functions.

Its key objectives include:

• Ensuring the continuity of critical bank operations during a crisis.
• Protecting taxpayers by avoiding costly bailouts.
• Safeguarding depositors and maintaining confidence in the financial system.
• Ensuring fair burden-sharing among shareholders and creditors.

Key Responsibilities

• Developing and implementing resolution plans for major banks under its remit.

• Determining if a bank is “failing or likely to fail” and triggering resolution when conditions are met.

• Using resolution tools like bail-in, sale of business, and bridge banks to manage collapse scenarios.

• Managing the Single Resolution Fund (SRF) – a pooled fund financed by the banking sector to support resolution actions.

• Coordinating with national resolution authorities to oversee the resolution of smaller banks.

• Publishing MREL (Minimum Requirement for own funds and Eligible Liabilities) targets and resolution strategies.

Regulatory Role

The SRB works in close cooperation with:

• The European Central Bank (ECB), which supervises significant banks and signals when one is failing.

• National Resolution Authorities (NRAs) across the eurozone, executing resolution plans for local institutions.

• The European Commission, which must approve use of the SRF and assess compliance with EU state aid rules.

Its power is derived from the Bank Recovery and Resolution Directive (BRRD) and the Single Resolution Mechanism Regulation (SRMR), which provide the legal framework for handling failing banks in the EU.

Impact on Financial Institutions

The SRB fundamentally changes how EU banks prepare for crisis. All banks must now maintain sufficient MREL to absorb losses and recapitalize operations in a resolution scenario. Institutions deemed systemic must produce playbooks, financial continuity plans, and undergo resolvability assessments.

The SRB enforces:

• Bank accountability for recovery and resolution planning.
• Pre-positioning of bail-inable instruments.
• Legal and operational separation of critical functions.
• Compliance with stringent funding and governance structures during crisis scenarios.
  

In doing so, the SRB reduces moral hazard, ensures private sector loss absorption, and provides a credible alternative to bailouts.

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