The introduction of the Single Resolution Mechanism: a necessary step for completing the Banking Union
In order to increase the stability of the financial system, Europe is in the process of creating a Banking Union. The Banking Union consists of four pillars: one set of rules (the single rule book), one European supervisor (the single supervisory mechanism – SSM), one framework for recovery and resolution of banks (the single resolution mechanism – SRM) and one harmonised European Deposit Guarantee Scheme (DGS).
According to Rabobank the Single Resolution Mechanism (SRM) is a necessary next step for completing the Banking Union. A resolution mechanism at the European level supplementary to the single supervision by the ECB is a necessity to increase the stability of the European financial system.
The Rabobank opinion is focused on five aspects: Structure and governance; European vs. national rules; legal protection; fund and; connection and transition between different pillars of the Banking Union