ECB press release: The European Central Bank welcomes the political agreement reached on the single resolution mechanism (SRM) on Thursday morning. The negotiations between the European Parliament and the European Council produced an SRM that is more efficient and credible. “It is a very good agreement,” ECB President Mario Draghi said in Brussels.

The ECB has always stressed that an effective SRM has to be adequately funded. It therefore welcomes that the Single Resolution Fund will have greater firepower in its early years and thus be more effective in breaking the link between banks and sovereigns and protecting taxpayers’ money. There will also be a clear reference to establishing an enhanced borrowing capacity for the fund.

The smooth functioning of the SRM requires a swift and efficient decision-making process. The ECB welcomes the fact that the proposal now caters for a swifter procedure, ensuring timely resolution decisions. “This is great progress for a better banking union. Two pillars are now in place,” Mr Draghi said.