This document is an excerpt from the EUR-Lex website
Glossary of summaries
SINGLE RESOLUTION MECHANISM
The 2008 financial crisis exposed many problems in the EU's banking sector. Many of these were serious and taxpayers ended up coming to the rescue. It became clear that, particularly in the euro area where countries shared a currency, action would need to be taken at EU level rather than relying on national policy measures.
The EU therefore took action to ensure that banks' behaviour would never again undermine the foundations of the financial system by proposing the creation of a Banking Union. The EU's Banking Union comprises:
The SRM comprises:
The SSM, the second pillar of the Banking Union, gives the European Central Bank direct supervisory powers over the euro area's banks, although smaller banks remain under the direct responsibility of national supervisors.