Brussels, 21/03/2014 (Agence Europe) - On Friday 21 March, the European summit welcomed the agreement struck the day before by the member states and the European Parliament on creation of a bank resolution mechanism (SRM) in the eurozone (see EUROPE 11043).
The EU heads of state said “this is a major achievement that will pave the way to the completion of banking union. It is important now to formally adopt the regulation before the end of the current legislature. Together with the intergovernmental agreement on the transfer and mutualisation of contributions to the Single Resolution Fund, this represents another crucial step towards a stronger and more resilient economic and monetary union.” A single supervisory mechanism will cover some 130 big banks in the EU from November 2014 onwards, and SRM will come into force in 2015. SRM's bank resolution fund, SRF, will have a budget of €55 billion in 2023 and may help wind up failed banks. It will come on stream in 2016, firstly on an intergovernmental basis. Some commentators say that given the lack of any joint guarantee system, banking union cannot be viewed as completed.
The European Parliament will endorse the draft regulation at the second plenary in April. (MB)