Since 2015, the Single Resolution Board (SRB), the central resolution authority within the Banking Union, aims at ensuring orderly resolution of big failing banks with minimum impact one the real economy.
On Thursday the 6 of December, the Chairperson of the SRB, Elke König, delivered a speech at the ECON Committee proving an overview on the achievements of the SRB, the future challenges and priorities.
More specifically, on the resolution planning, which consists in a comprehensive description of banking groups and resolution action that the Single Resolution Mechanism might implement in case of failing banks, the ambition of the SRB is to draft bank-specific resolution plans to cover all banking groups.
Regarding MREL, Ms König pointed out that progress has been made on the definition and quality of MREL. In this regard, the SRB expects to adopt more than 100 group-level MREL decision in 2019 and to determine MREL targets for over 500 individual entities. Ms König also stressed that MREL-gaps will need to be closed going forward to ensure resolvability.
During her speech, the SRB Chairperson highlighted the progress made on the Banking Union. Nevertheless, she reminded the European Parliament of the importance of the promotion and implementation of the third pillar of the Banking Union, the European Deposit Insurance Scheme, which for the moment is lacking behind.
Concerning the Banking Package, Ms König congratulated the European Parliament for the political agreement achieved. However, regarding the content, the Chairperson of SRB stressed that the accomplishments do not reflect the progress made in Banking Union. The so-called “fishing option” and the provisions on internal MREL risk to lead to fragmentation of powers within the Banking Union, and the potential ring-fencing of loss absorption capacity within banking groups. Finally, concerning the Home and Host relationship, a balance is necessary and the SRB should address this topic.
The SRB public hearing at the ECON Committee took place the same day Andrea Enria, the President of the European Banking Authority, after being appointed by the European Parliament in November 2018, was confirmed by the Council as the successor of Danièl Nouy as Chair of the Supervisory Board.
By Elona Morina, European Affairs, ABBL