The
The resolution of these banks was approved under the EU's bank recovery and resolution framework - through the sale-of-business tool - to Hrvatska PoStanska Banka d.d. and
Today's decisions mean that these two banks will open on Wednesday, 2 March, as normal and their customers will continue to be served without disruption. This will ensure that financial stability in
The Commission has endorsed the resolution schemes in line with the EU resolution framework, given that the conditions for resolution set out in this framework were met: the banks were failing, there were no private sector solutions outside of resolution, there were no supervisory actions that would have prevented its failure, and a resolution action was necessary in the public interest.
The Commission has also taken note that the SRB deemed that resolution is not necessary for
Furthermore, the Commission has also taken note of the decision by the Czech authorities to close and wind down the Czech subsidiary. Depositors will be compensated up to
Background
On Monday 28 February, the
'Resolution' means the application of one or more resolution tools in order to achieve one or more resolution objectives. Resolution objectives can be, inter alia, (i) to ensure the continuity of a bank's critical functions, (ii) to avoid significant effects on the financial system, (iii) to protect public funds by minimising State aid, (iv) to protect depositors.
Under the Single Resolution Mechanism Regulation, the Single Resolution Board determines that a bank should undergo resolution in case the bank (1) is failing or likely to fail, (2) there were no alternative private solutions, and (3) a resolution action was necessary in the public interest. In that case, it transmits a resolution scheme to the Commission. The Commission has then to either object or endorse that resolution scheme.
Resolution by the sale-of-business tool is foreseen in the Single Resolution Mechanism Regulation (SRMR) and the Bank Recovery and Resolution Directive (BRRD) under the EU bank resolution framework.
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