Single Resolution Board (SRB) chair Dominique Laboureix declared on Tuesday that the contentious EU bank crisis fund has achieved its targeted capacity of €78 billion.
This accomplishment implies that financial institutions will no longer be required to make additional yearly contributions. The purpose of the Single Resolution Fund is to prevent taxpayer-funded bailouts akin to those witnessed in 2008.
Eurozone banks collectively have been contributing ten billion euros annually until the fund reaches a threshold equivalent to 1% of total bank deposits.
The Fund “has reached its target level”, Dominique Laboureix, who chairs the Single Resolution Board (SRB) which administers the reserve, said at a conference in Brussels. “The SRB will not be issuing a request for contributions for this current year”.
Bank of Valletta, HSBC Malta and Me Direct Bank are part of the Single Resolution Fund.
Also on Tuesday the SRB launched the Single Resolution Mechanism’s new strategic vision up until 2028.
The strategy, called SRM Vision 2028, marks a clear shift for the SRM, as it begins a new phase of work that takes into account the evolving risk landscape. The SRB and national resolution authorities are moving from the key elements of resolution planning and preparation to include an increased focus on operationalisation, resolution testing and crisis readiness. This will ensure that each plan and preferred resolution strategy for each bank can be implemented and at short notice, making us even more crisis-ready and resilient.
Other key elements include a focus on communication, transparency and engagement with European, global and industry stakeholders. To achieve this, the SRM will increase efficiency and simplify decision-making. The SRB will also focus on boosting staff career development, improving gender balance and strengthening its IT systems and digitalisation, while enhancing cybersecurity
The strategy was developed over the past 12 months, with seven different consultations, both internally as well as with NRAs and industry. The strategy covers three key areas: Core Business, Governance and Human Resources. It has nine strategic objectives, with 20 action plans to be implemented between now and the end of 2028. The specific activities and performance indicators will be included in the upcoming SRB’s Multi-Annual Plan.
Christian Buttigieg, Head of Resolution at the Malta Financial Services Authority, commented: “The Malta Financial Services Authority is pleased to have contributed to the development of this new strategy for the SRM. This is a bold new vision and will help ensure we can continue to enjoy a stable banking system here in Malta and right across Europe.”
“I am pleased with the cooperation with our colleagues at the MFSA and indeed all the National Resolution Authorities within the Banking Union as well as the European Central Bank, the European Commission and industry. Their input and feedback will help us to bring forward efficiencies, simplification and to become even more transparent, as well as finding new ways of doing things,” said SRB Chair Dominique Laboureix.
Bank of Valletta also welcomed this news and as a contributor to the SRB, the Bank remains supportive of initiatives which secure financial stability.