Banks, stop the 'levies' for the Single Resolution Fund

The Single Resolution Fund, the euro area tool dedicated to securing banks in crisis, is ready. And the banks will not be asked for further contributions, unless new (and as yet unforeseen) needs arise. This was stated by Dominique Laboureix, chairman of the Single Resolution Board, the management committee of the EU agency. "Thanks to the contributions made by European banks over the last eight years, the fund has reached the planned 78 billion, which is 1% of the total amount of covered deposits of credit institutions in all twenty-one countries of the banking union. We effectively have this amount in our pockets. And the bankers will not be asked for anything else,' the senior official explained in a meeting with international newspapers in Brussels.

The Resolution Fund is an emergency fund that can be used in times of crisis. It can be used to ensure the effective application of resolution tools and to resolve failing banks once other options, starting with the bail-in, have been exhausted. Through its presence, the Fund ensures the stability of the financial sector as a whole. All banks in the 21 countries of the banking union since 2016 have paid an annual fee on the basis of their liabilities to reach the 1 per cent threshold, a level that has now been reached. "We have asked the banks for about 10 billion a year for the last eight years. But today I am happy to announce to the banking sector that the Srb will not issue a call for contributions for the current year, 2024. We will finalise the details in the coming days,' explains the Srb's number one, who today held a conference in the Belgian capital with resolution authorities, supervisory bodies, policy makers and the banking sector to discuss progress and challenges for financial stability.

Today's meeting was also an opportunity to present the new strategic vision of the single resolution mechanism until 2028. The strategy marks a clear turning point for the Srm. "It begins a new phase of work that takes into account the evolving risk landscape," Laboureix explained. The Srb and national resolution authorities are moving away from key elements of planning to include 'a new focus on operations, resolution testing and crisis preparedness. This will ensure that each bank's preferred resolution plan and strategy can be implemented at short notice, making us even more prepared and resilient to crises,' Laboureix adds.

The strategy has been developed over the last 12 months, with a total of seven different consultations, both internally and with national regulatory agencies and industry. And it covers three key areas: Core Business, Governance and Human Resources. It has nine strategic objectives with 20 actions to be implemented by the end of 2028. Specific activities and performance indicators will be included in the next Srb multi-year plan. "I welcome the cooperation with all 21 national resolution authorities within the Banking Union, as well as with the European Central Bank, the European Commission and industry. Their input and feedback will help us to promote efficiency, simplification and become even more transparent."