The banking industry in participating Member States will need to pay contributions toward the SRB and the SRF.
The aim of the SRM is to make a bank’s shareholders and creditors responsible for the costs of its resolution. If however, additional capital is needed, the SRB will have the opportunity to utilise the SRF, which will be established to provide medium-term funding support for a bank’s resolution in participating Member States. In this sense, the SRF is intended to be a back-up, in the event that a bank’s shareholders and creditors cannot bear the costs of resolution, to ensure that funding is available during a bank restructuring. It is not intended to be a bail-out fund.
On 9 December 2014, the Council of the EU reached political agreement on the implementing Regulation that determines the contributions to be paid by banks to the SRF. The SRF will be built up over a period of eight years to reach a target level of at least 1% of the amount of covered deposits of all banks authorised in all participating Member States. Banks will have to make annual contributions to the SRF. These will be calculated on the basis of their liabilities, excluding own funds and covered deposits, and adjusted for risk.
For Member States participating in the EU Banking Union, the national resolution funds set up under the BRRD as of 1 January 2015 will be replaced by the SRF as of 1 January 2016.
Under the BRRD, the target level of the national resolution funds is set at the national level and calculated on the basis of covered deposits. Under the SRM the target level of the SRF is the sum of the covered deposits of all institutions of participating Member States. To mitigate any abrupt increase in fees for banks in some participating Member States when switching to the European target level, political agreement in the Council was reached. An implementing Regulation was agreed, which provides for an adjustment mechanism during the initial eight years when the SRF is being built up.
Between 2016 and 2023, annual contributions by banks will be calculated in a manner that is increasingly based on the SRM target level. In the first year 60% of banks’ contributions will still be calculated in accordance with national target levels, this share will decrease annually so that by the eighth year all banks’ contributions will be calculated on the basis of the SRM target level.
The SRB will also be funded by levy. On 11 December 2014 a Commission delegated Regulation was published in the OJ which will allow the SRB to collect contributions to cover its expenditure until a final system is adopted by the Commission. The contributions will be collected from those banks that are deemed to be significant for the purposes of supervision by the ECB under the SSM.