The Single Resolution Mechanism has been established by Regulation 806/2014, to ensure a uniform application of the resolution regime set out by the recent Banking Recovery and Resolution Directive 2014/59/EU, through a centralization of the relevant powers (essentially entrusted to a newborn agency, the Single Resolution Board). After describing the rationale for the SRM and its general features, this work focuses on the weaknesses of this innovative mechanism, concerning both the decision-making process (very intricate and cumbersome) and the controversial legal basis adopted for the creation of the concerned apparatus (art. 114 TFEU). In fact, a rule on the “approximation of the provisions laid down by law, regulation or administrative action in Member States” could be unable to provide a robust legal basis for the construction of such a complex mechanism and especially for the institution of a new atypical agency, such as the SRB. Our conclusion is that the structure of the SRM can, however, be considered as a good compromise. In fact, the undoubted complexity of the decision-making process is necessary to respect the EU fundamental principle of institutional balance and to ensure an appropriate protection to the rights of creditors and shareholders of the distressed entities. On the other hand, the main concerns about the appropriateness of the legal basis of the SRM seem to be to a large extent overcome by the most recent rulings of the ECJ, as mentioned in the paper.

Failing Banks in the EU Single Market. The Forthcoming Single Resolution Mechanism.

CIRAOLO, Francesco
2014

Abstract

The Single Resolution Mechanism has been established by Regulation 806/2014, to ensure a uniform application of the resolution regime set out by the recent Banking Recovery and Resolution Directive 2014/59/EU, through a centralization of the relevant powers (essentially entrusted to a newborn agency, the Single Resolution Board). After describing the rationale for the SRM and its general features, this work focuses on the weaknesses of this innovative mechanism, concerning both the decision-making process (very intricate and cumbersome) and the controversial legal basis adopted for the creation of the concerned apparatus (art. 114 TFEU). In fact, a rule on the “approximation of the provisions laid down by law, regulation or administrative action in Member States” could be unable to provide a robust legal basis for the construction of such a complex mechanism and especially for the institution of a new atypical agency, such as the SRB. Our conclusion is that the structure of the SRM can, however, be considered as a good compromise. In fact, the undoubted complexity of the decision-making process is necessary to respect the EU fundamental principle of institutional balance and to ensure an appropriate protection to the rights of creditors and shareholders of the distressed entities. On the other hand, the main concerns about the appropriateness of the legal basis of the SRM seem to be to a large extent overcome by the most recent rulings of the ECJ, as mentioned in the paper.
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11570/3032373
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