- Bank resolution and insolvency — Eurozone
This chapter analyses the governance or decision-making structure of the Single Resolution Mechanism (SRM), particularly with respect to financing of the Single Resolution Fund and adoption of resolution schemes. The negotiations on the SRM and its governance were very difficult. The complex end result is clearly a compromise. Certain aspects of the complexity are due to technical reasons of European law. The SRM’s complex governance structure may well have a negative impact on the effectiveness of decision-making within the SRM framework—efficient, impartial, decisive, and quick decision-making is obviously crucial in the case of bank resolution. Whether the complex governance structure of the SRM will indeed have a negative impact on decision-making within the SRM framework remains to be seen. So far, there has been only one Single Resolution Board-led bank resolution, that of the Spanish bank Banco Popular. The chapter states that it would be premature to draw any conclusions from it, but the creation of the SRM (combined with the Single Supervisory Mechanism) is a milestone for the Eurozone and any other Member States deciding to join.
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