Single Resolution Board (SRB) Overview

<p>Bridge bank (B)</p> Signup and view all the answers

<p>Relevant authorities (C)</p> Signup and view all the answers

<p>To ensure the continuity of vital banking functions (A)</p> Signup and view all the answers

<p>Converts debt and equity to mitigate losses on the public (D)</p> Signup and view all the answers

<p>It necessitates that objectives are not met through normal insolvency processes (B)</p> Signup and view all the answers

<p>Shareholders of the institution (A)</p> Signup and view all the answers

<p>€ 100,000 (C)</p> Signup and view all the answers

<p>No creditor shall incur greater losses than in normal insolvency proceedings. (B)</p> Signup and view all the answers

<p>Management must be replaced unless necessary for resolution objectives. (B)</p> Signup and view all the answers

<p>The SRB adopts a resolution scheme and may involve the SRF if needed. (D)</p> Signup and view all the answers

<p>To express an objection or approval within 24 hours after SRB sends the scheme. (B)</p> Signup and view all the answers

<p>Creditors' losses are incurred in accordance with their priority claims. (C)</p> Signup and view all the answers

<p>Under national law, both civil and criminal law apply. (A)</p> Signup and view all the answers

<p>To obtain a comprehensive understanding of the banks and their critical functions (D)</p> Signup and view all the answers

<p>8% of total liabilities including own funds (D)</p> Signup and view all the answers

<p>1% of the amount of covered deposits of all credit institutions (B)</p> Signup and view all the answers

<p>A transitional period of eight years before full mutualization (C)</p> Signup and view all the answers

<p>Increasing shareholder dividends during a crisis (A)</p> Signup and view all the answers

<p>To raise funds at the national level through contributions from the banking sector (B)</p> Signup and view all the answers

<p>EUR 10.8 billion (C)</p> Signup and view all the answers

<p>Financial performance in the stock market (A)</p> Signup and view all the answers

<p>Banks that are significant or have been directly supervised by the European Central Bank. (C)</p> Signup and view all the answers

<p>Ensure the orderly resolution of all banks in participating Member States. (C)</p> Signup and view all the answers

<p>Bank Recovery and Resolution Directive (BRRD). (C)</p> Signup and view all the answers

<p>Direct control over bank mergers. (B)</p> Signup and view all the answers

<p>To prevent disruptions in the financial system and the real economy. (D)</p> Signup and view all the answers

<p>Centralized decision-making power in respect of resolution. (C)</p> Signup and view all the answers

<p>Significant banks and cross-border banking groups. (D)</p> Signup and view all the answers

<p>They collaborate with the SRB in bank resolutions. (A)</p> Signup and view all the answers

<p>To create a decision-making framework for resolution in the Banking Union. (B)</p> Signup and view all the answers

<p>When there is a need to ensure high resolution standards are consistently applied. (C)</p> Signup and view all the answers

<p>To adopt the resolution scheme for any bank requiring SRF utilization. (A)</p> Signup and view all the answers

<p>The European Commission and the Single Supervisory Mechanism. (B)</p> Signup and view all the answers

<p>They are directly responsible for implementing resolution schemes for those banks. (D)</p> Signup and view all the answers

<p>To restructure a bank while safeguarding public interest and minimizing taxpayer costs. (A)</p> Signup and view all the answers

<p>A general instruction or a warning. (A)</p> Signup and view all the answers

<p>The SRB and relevant NRAs must adopt a resolution scheme. (C)</p> Signup and view all the answers

<p>The market for those assets is such that their liquidation could adversely affect financial markets. (A)</p> Signup and view all the answers

<p>The authority must give consent from the shareholders. (A)</p> Signup and view all the answers

<p>A prudent estimate of the capital needs of the AMV. (B)</p> Signup and view all the answers

<p>To establish effective governance and accountability. (B)</p> Signup and view all the answers

<p>When there is a risk of adverse effects on multiple financial markets. (B)</p> Signup and view all the answers

<p>Through debt issued by the AMV. (B)</p> Signup and view all the answers

<p>The entity responsible for resolving financial issues of institutions under distress. (D)</p> Signup and view all the answers

<p>Public authorities have ownership or control over the AMV. (B)</p> Signup and view all the answers

The resolution authority for significant banks and cross-border groups within the Banking Union.

Responsible for resolving banks in Banking Union member states.

Regulates aspects of bank failure resolution, like planning, early intervention, and applying resolution tools.

Legal framework supporting the SRM, relating to resolution powers.

Assist in resolving failing banks, working alongside the SRB within the Single Resolution Mechanism.

Banks deemed crucially important, directly supervised by the ECB.

Groups with parent and subsidiary banks present in more than one Banking Union Participant.

A union of EU member states that share banking regulations and supervision.

A 2014 regulation creating an integrated framework for resolving banks in the Banking Union.

Bank restructuring, using resolution tools, prioritizing stability, and minimizing tax burdens, by authorities.

Fund used in certain bank resolution situations managed by SRB.

Primary responsibility for banks not directly under SRB's remit.

SRB can take full control of a resolution if consistency is needed across jurisdictions.

A plan developed and executed to solve troubled bank situations, ensuring financial stability.

Shareholders of a failing institution are the first to bear losses.

Creditors of the same type are treated fairly, unless specific rules say otherwise.

Creditors can't lose more than they would in a standard bankruptcy.

In a bank failure, creditors lose after shareholders, following bankruptcy rules except if special rules apply.

Bank management must be replaced unless keeping them is helpful for solving the issues.

Individuals causing the bank's failure can be held legally responsible.

€100,000 per depositor per bank is the limit of deposit protection.

The SRB decides on the plan to resolve a bank after determining the conditions.

Methods used to intervene in a failing bank, aimed at preserving economic functions, minimizing impact, and preventing a wider financial crisis, which include sale of business, bridge bank, asset separation and bail-in.

Bank's status when it is believed to be in imminent danger of collapse, requiring intervention; a critical threshold for triggering the resolution process.

Goals of a bank resolution, which are to protect vital financial functions, the real economy and minimize damage to the financial system when a bank faces serious trouble.

Bank resolution tool for transferring a bank's assets to a third party. This can be partial or total transfer of assets, liabilities and shareholdings to a purchaser.

A temporary entity created to take over assets and liabilities of a failing bank, allowing a smooth transition during resolution.

A resolution tool for resolving a failing bank, which forces the bank's shareholders and creditors to absorb losses rather than public funds.

A factor considered when deciding whether to intervene with resolution tools, where maintaining a bank is seen as more beneficial than allowing it to fail normally

A separate entity created to manage assets of a failing bank during resolution. It can be fully or partially owned by government authorities.

The entity (like SRB) responsible for overseeing a failing bank's resolution. It can take control of the bank's assets, including shareholders' rights.

The AMV's rules and regulations are approved by the resolution authority.

The resolution authority appoints or approves the management team of the AMV.

The funding for the AMV depends on the value of the assets transferred. It can be funded through debt issued by the AMV itself and by bail-in.

Assets are transferred to the AMV if their liquidation could harm financial markets, if it's necessary for the failing bank's stability, or if it maximizes proceeds from liquidation.

Bail-in means using the shareholders' and creditors' money to recapitalize a failing bank.

Bail-in amounts should consider the AMV's capital needs. The AMV can be funded with debt issued by itself.

The Single Resolution Fund is a mutualized fund for covering losses or recapitalizing failing banks in the Banking Union. It is built through contributions from banks and has a target level based on covered deposits.

The Single Resolution Board (SRB) manages the SRF. It uses the fund to cover losses or recapitalize banks after shareholders and creditors have contributed a certain amount.

The SRF is built up gradually through contributions from banks collected by national authorities (NRAs). The target size changes based on the amount of covered deposits.

The SRB's crucial task is to create plans for resolving failing banks within the Banking Union. Plans ensure banks can be resolved smoothly and quickly, minimizing disruption to the financial system.

The SRB's resolution planning aims to: 1) understand a bank's operations and critical functions, 2) identify and remove obstacles to its resolution, and 3) be ready to resolve the bank if necessary.

The first step in resolution planning is to create a detailed picture of the bank, including its structure, finances, business model, critical functions, and interdependencies.

The SRB assesses whether a failing bank should be wound up through insolvency proceedings or resolved via specific resolution tools. They then develop a preferred strategy to achieve resolution objectives.

The SRB looks at the financial and operational requirements to ensure a failing bank can be resolved smoothly, maintaining critical functions while minimizing disruption.