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4
Section A
• a Single Resolution Mechanism for unviable credit institutions (also mainly
incorporated in euro area Member States), and a Single Resolution Fund
to cover any resulting funding gaps, provided that a decision is made on
the resolution of such credit institutions,
16
• a single deposit guarantee scheme,
17
which coupled with the Single Reso-
lution Board (a part of the Single Resolution Mechanism) could form a ‘Eu-
ropean Deposit Insurance and Resolution Authority’, or EDIRA, and
• a ‘single rulebook’ (‘einheitliches Regelwerk’, ‘recueil réglementaire
unique’) containing substantive rules on all the previous aspects, aiming
at a ‘total harmonisation approach’, as part of the single market for À-
nancial services, applicable across EU Member States.
Arnone, Darbar and Gambini (2007)
,
Basel Committee on Banking Supervision
(2012)
, and
Thiele (2014)
, pp. 63-235 (as part of Ànancial supervision).
16. The term ‘resolution’ (“Abwicklung” in German, “résolution des défaillances” in French)
encompasses all the measures taken to resolve problems arising from the exposure to in-
solvency of (mainly, but not exclusively, systemically important) Ànancial Àrms and avoid
an initiation of liquidation proceedings (thus preventing spillover effects of a bank’s fail-
ure on the economy) or resort to bailout measures through public Ànancial assistance
facilities. On the concept(s) of ‘resolution’, see
Huertas and Lastra (2011)
, pp. 258-267,
Binder (2014)
, pp. 3-17, and
White and Yorulmazer (2014)
.
On resolution powers and instruments see indicatively (out of a vast existing literature)
Avgouleas, Goodhart and Schoenmaker (2009)
,
Cihák and Nier (2009)
,
Amorello and
Huber (2010)
,
Claessens, Herring and Schoenmaker (2010)
,
Noussia (2010)
,
Attinger
(2011)
, individual contributions to the collective volume
Lastra (2011a,
editor
)
,
Finan-
cial Stability Board (2011)
,
Babis (2012)
,
Dewatripont and Freixas (2012)
,
Grünewald
(2014)
,
Hadjiemmanuil (2014)
, and
White and Yorulmazer (2014)
.
In particular on the bail-in instrument, see
Coffee (2010)
,
Huertas (2012)
,
Goodhart
and Avgouleas (2014)
, and
Avgouleas and Goodhart (2015)
. More speciÀcally on the
resolution by deposit guarantee schemes, see
Beck and Leaven (2006)
. The speciÀc as-
pect of cross-border resolution of global banks is discussed in
Hüpkes and Devos (2010)
and in
Faia and Mauro (2015)
.
Finally, on resolution Ànancing see
Goodhart (2012)
, and
Nieto and Garcia (2012)
.
17. Deposit guarantee schemes (hereinafter the ‘DGSs’) serve two (2) main functions:
(a)
The primary function of DGSs is considered that of the ‘paybox’ for depositors. DGSs
are part of the ‘bank safety net’ and have, in that respect, two objectives: the protection
of small depositors, and acting as buffer mechanisms in the event of a banking crisis, con-
tributing to ensuring the stability of the banking system.
(b)
In certain jurisdictions DGSs are also called upon to assist with the Ànancing of bank
resolution.
In addition, DGSs may use their available Ànancial means for the adoption of ‘alternative
measures’ in order to prevent the failure of a credit institution or to Ànance measures to
preserve the access of depositors to covered deposits in the context of national insol-
vency proceedings. See more details in
Gortsos (2014a)
, pp. 31-34.