SRB and BoE Agree to Work Together on Resolution of Cross-Border Banks
SRB announced that it continues to work closely with BoE to ensure that appropriate arrangements are in place for effective cooperation on the management of the failure of cross-border banks, should the need arise. This is underpinned by a cooperation arrangement that came into force on January 01, 2021 and will help to facilitate bank resolution while maintaining financial stability in EU and UK.
The cooperation arrangement sets out the framework for consulting, cooperating, and exchanging information when preparing for and implementing bank resolution in UK and the EU Banking Union, in line with the rules in both jurisdictions. This arrangement on the exchange of information and cooperation is in connection with the resolution planning and the implementation of such planning with respect to entities with cross-border operations. As the condition of an entity deteriorates, cooperation between the authorities is expected to intensify as well. Additional communications may take place under the terms of this cooperation arrangement or as otherwise agreed by the authorities. The arrangement, which is based on reciprocity and proportionality, recognizes the complex nature of cross-border bank operations. This arrangement started to apply on the date the European Treaties and the EU secondary legislation ceased to apply in UK. Authorities may review the functioning and effectiveness of cooperation and information exchange under this arrangement, either every two years or earlier, if deemed necessary by both authorities. Amendment of this arrangement requires mutual consent of the authorities.
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Keywords: Europe, EU, UK, Banking, Banking Union, Resolution Planning, Cross-Border Resolution, Resolution Framework, SRB
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