Functioning of the Single Resolution Mechanism

Transcription

1 Functioning of the Single Resolution Mechanism Conference on Completing the Banking Union Wednesday, 14 February 2018 Marko Bošnjak Vice

2 Agenda 1. Single resolution Mechanism - Cooperation with Single Resolution Board Resolution Unit in the Bank of Slovenia Responsibility for resolution plans and resolution decision Implications in financial crisis MREL Resolution or Insovency Procedure? Available tools 2

3 Single resolution Mechanism Cooperation with Single Resolution Board Bank of Slovenia Single Resolution Board Governing board of the Bank of Slovenia SRB Board Member Chair Member Member Member Member s office Public Relations Resolution Unit Legal Department Plenary Session Representatives of 19 Euroarea Member States Committees and Networks Analysis Internal Audit Operations Central Credit Register Supervision General Affairs Resolution Committee Administrative and Budget Committee Fund Committee Information and Communication Technology Network Legal Network Internal resolution teams (preparation of resolution plans) 3

4 Resolution Unit in the Bank of Slovenia Governing board of the Bank of Slovenia Resolution and Deposit Guarantee Scheme Tasks: (Financial Stability) s office Public Relations Internal Audit Resolution Unit Legal Department Central Credit Register identification of systemic importance resolution legal aspects data collection communication and technology fund collection and transfer DGS and resolution fund management DGS payout Analysis Operations Supervision General Affairs Analysis and Research Banking Operations Banking Supervision Internal Finance and Controling Financial Stability and Macroprudential Policy Payments and Settlements Systemic Supervision and Prudential Regulation Organisation and Personel Financial Statistics Cash Department Building Services Department International Relations Information Technology 4

5 Responsibility for preparing resolution plans and taking the resolution decission SI SSM banks NLB NKBM Abanka members of SSM groups Unicredit SKB Sberbank Intesa Sanpaolo Sparkasse Addiko bank other banks Gorenjska banka Deželna banka Delavska hranilnica Hranilnica Vipava Hranilnica LON SRB Bank of Slovenia non-ssm, cross-boarder banking group 5

6 Implications in financial crisis going concern crisis management financial distress resolution liquidation procedure bank MREL bank's internal measures preventive measures recovery, early intervention resolution critical functions banks authonomy supervision supervision / resolution resolution 6

7 MREL MREL (Minimum Required Own Funds and Elegible Liabilities for Bail-in) - core idea of the Bank Recovery and Resolution Directive* (BRRD) is to avoid the use of taxpayers' money in the times of crisis, - demanded funds for bail-in to ensure further functioning of the critical functions of a bank, - funds, that are not covered deposits, with maturity above one year, - if MREL (banks own contribution) is not sufficient to restore the capital adequacy of the bank, Single Resolution Fund can be used, - if at the time of decission resolution is chosen preferrably to liquidation Slovene resolution fund can be used. * DIRECTIVE 2014/59/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms 7

8 Resolution or Insovency Procedure? Critical Functions? YES NO Public Interest? YES NO Insolvency Procedure Resolution Determination of Critical Functions and Public Interest is preliminary within resolution plans and reassessed in the time of crisis. 8

9 Available tools Critical Functions, Public Interest? YES Resolution bail-in sale of business asset separation bridge bank if bail-in instruments are not sufficient, Single Resolution Fund provides the missing part * NO Insolvency procedure sale of business sale of assets asset separation if assets exhausted Bankrupcy procedure *Use of Single resolution Fund is preconditoned with bail-in of 8 % of total assets and own funds and limited to up to 5% of total liabilities and own funds. 9

10 Final thoughts Priority for banks is running a successfull business model. Additional information for resolution plans directly from banks is reduced to minimum extent possible. Internal Resolution Teams are open for discussions with banks. Thank you 10