Ecofin Council agrees on bridge financing for Single Resolution Fund
The Ecofin Council agreed on Tuesday to provide national credit lines of up to 55 billion euros as a backstop to the Single Resolution Fund (SRF) to which banks are to pay annual fees. “In line with the commitment taken in December 2013, the member states participating in the Banking Union agree to put in place a system of bridge financing arrangements in order to ensure sufficient funding to the SRF during the transitional period,” the Ecofin Council said in a press statement.
As of 2016, each participating member state will enter into a harmonised loan facility agreement with the Single Resolution Board (SRB), providing a national individual credit line to the SRB to back its national compartment in the SRF in case of possible funding shortfalls following resolution cases of banks of the member state concerned. “With this agreement, participating member states ensure a credible start of the SRF as of early 2016,” the Ecofin Council said. See also our latest cepPolicyBrief on the matter.