What changes will joining the SRM bring to credit institutions and what to national resolution authorities, i.e. the CNB?

Published: 3/6/2020

Joining the SRM will not bring any significant changes to credit institutions headquartered in Croatia. This is because Croatia has been gradually and continuously aligning its legislation with the EU legislation ever since EU accession on 1 July 2013 when Croatia gained full EU membership. Therefore, joining the SRM is just one more step in that direction. As regards resolution powers over credit institutions, at the time of joining the SRM Croatia will be fully aligned with all the relevant European legislation in that area.

Most credit institutions that are members of groups in the EU already had the SRB as the group level resolution authority before joining the SRM. Therefore, these credit institutions are already familiar with the work of the SRB and its key procedures and methodologies, and will not see any significant changes in their operations.

Credit institutions that will not have the SRB as the direct resolution authority, i.e. those credit institutions that will be under the direct responsibility of the CNB, will also not see any significant changes on operational level that would result from Croatia joining the SRM. The reporting and communication systems in place between the CNB as the resolution authority and credit institutions will remain the same.

After Croatia joins the SRM the role of the CNB as the resolution authority will partly change. The most important change will be that the CNB representatives will participate directly in the work and decision-making of the SRB. A CNB representative will participate in the plenary sessions of the SRB as a full member along with the representatives of other participating Member States, as well as in the executive sessions of the SRB in the cases provided for by the Regulation (EU) 806/2014.

After Croatia joins the SRM the role of the DAB will also change. The DAB will be obliged, like the CNB and the national resolution authorities in other member states, to harmonize all its important decisions and methodologies with the SRB. Operationally, the most important change will be that the DAB will continue to collect annual contributions from credit institutions headquartered in Croatia in the same way it had done before Croatia joined the SRM, but this time it will do so in accordance with the instructions from the SRB and the amounts collected will be transferred to the account of the Single Resolution Fund.