Today the Council formally appointed the Chair, the Vice-Chair and the four other permanent members of the Single Resolution Board. This concludes a recruitment process which started in July 2014. The methodology for calculating banks' contributions to the Single Resolution Fund was also been adopted today.
Valdis Dombrovskis, European Commission Vice-President, said:"Today's appointment of the Single Resolution Board members shows that Europe is making the necessary steps towards Banking Union and a deepened Economic and Monetary Union. I am convinced that Elke König and her highly qualified colleagues have the necessary clout and expertise for achieving the key objective of the Single Resolution Mechanism - dealing with failing banks without jeopardising financial stability, and enforcing the responsibility of bank shareholders and creditors instead of directly resorting to taxpayers' money."
"This is a strong Board with lots of experience. They now have the responsibility of taking the Single Resolution Mechanism forward, and will start work, on time in the New Year. I wish the new team every success; the Commission will continue to give them all the help they want" added Jonathan Hill, EU Commissioner for Financial Stability, Financial Services and Capital Markets Union.
Another milestone was reached this week when co-legislators approved the way that banks' contributions to the resolution funds will be calculated as of January 2015.
"The EU is living up to its commitments: it has delivered an operational Banking Union in record time. We are learning the lessons of the crisis and creating a sounder financial system," said Commissioner Hill. "It is now up to Member States to ratify the Inter-Governmental Agreement so that Banking Union resolution funds can be pooled into a Single Resolution Fund as of 2016."
The Single Resolution Mechanism ensures that if, despite stronger supervision, a bank subject to the Single Supervisory Mechanism were to face serious difficulties, its resolution can be managed efficiently with minimal costs to taxpayers and the economy. The Single Resolution Mechanism is backed by a Single Resolution Board and a Single Resolution Fund (see MEMO/14/2764).
The Single Resolution Board is the European Resolution Authority for the Banking Union and will work in close cooperation with the national resolution authorities of participating Member States.
The Board will carry out specific tasks to prepare for and carry out the resolution of a bank that is failing or likely to fail. A Single Resolution Fund will be set up under the control of the Board to ensure that funding support is available while a credit institution is being restructured.
The Board was established according to the Regulation on the Single Resolution Mechanism which entered into force on 19 August 2014. The Board will be operational as of 1st January 2015.
The Board will sit in two configurations :
- In the executive session, it will consist of a Chair (or a Vice-Chair) and four permanent members as follows
Chair: Ms Elke König (DE)
Vice-Chair: Mr Timo Löyttyniemi (FIN) (in the absence of Chair)
Strategy and Coordination Director: Mr Mauro Grande (IT)
Resolution Planning Directors: Mr Antonio Carrascosa (ES), Ms Joanne Kellermann (NL) and Mr Dominique Laboureix (FR)
And the relevant national authorities where the troubled bank is established.
- In its plenary session, the Chair, the permanent members and all participating Member States will sit.
The Permanent members of the Board were selected through a very stringent recruitment process. The Commission shortlisted the candidates and proposed a candidate for each position to the European Parliament.
After the European Parliament gave its approval on the Commission's proposal on 15 December, the Council, acting by qualified majority,backed the implementing decisions to appoint the Chair, the Vice-Chair and the Board Members.
The Chair, Vice-Chair and Board Members are appointed for a limited term; the Chair initially for a period of three years, renewable once for another five years; the Vice-Chair and the Board Members for a period of five years, non-renewable.
The biographies of the new members are available here.
This week, the European Parliament and the Council also notified the Commission that they have no objection to the Delegated Act that the Commission adopted on 21 October in order to calculate the contributions of banks to the national financing arrangements established by the Bank Recovery and Resolution Directive (BRRD) and to the Single Resolution Fund (SRF) (IP/13/674) established by the SRM Regulation (MEMO/14/295). Under the SRM, the target level of the Single Resolution Fund (SRF) is European and is the sum of the covered deposits of all institutions established in the participating Member States. This results in significant variations in the contributions by the banks under the SRM as compared to the BRRD. In order to smooth out differences, the Council has formally adopted an Implementing Act today, which sets out an adjustment mechanism to remedy these distortions. This adjustment mechanism will be applied during the transitional period while the SRM methodology is phased in. This confirms the agreement reached by the Council last week (see statement/14/2505).