SRM - What to expect from Banking Union

On 15 April 2014, the European Parliament adopted the Single Resolution Mechanism (SRM) Regulation, a key pillar of Banking Union of the Eurozone. This new system for resolving banks is fundamentally important for building confidence and underpinning future growth of the economies of Europe, breaking the dangerous linkage between the solvency of banks and the solvency of countries.

In this briefing, PwC looks at the key features of the SRM, and explains how banks will be affected. The SRM will be important for those banks either headquartered or doing business via subsidiaries in the countries of the Eurozone. The SRM defines how the Bank Recovery and Resolution Directive (BRRD), with its common rules for all EU countries, will be implemented in the Eurozone. These new rules signal a new approach to resolving banks in Europe: any public bailout should only occur after a very deep "bail-in" of shareholders and creditors. But will it work...