The distinction

A cross-border banking group is supervised and, if it fails, resolved by more than one authority. The home authority is the one responsible at the level of the group, the consolidating or group-level resolution authority in the Member State where the parent or ultimate group entity sits. The host authorities are those of the Member States in which the group operates through subsidiaries or significant branches. Each host authority has a legitimate interest in the parts of the group located in its jurisdiction, its depositors, its financial stability, its taxpayers, while the home authority looks at the group as a whole.

This division exists because a single group is one economic enterprise but many legal entities across borders. A resolution that is efficient for the group may impose losses or operational disruption in a particular host state, and a host authority may prioritise the entity it is responsible for. The framework's task is to reconcile these perspectives without giving any one authority a veto that could block a group solution or leave a host entity unprotected.

How cooperation is organised

The principal mechanism is the resolution college, a standing forum chaired by the group-level resolution authority and including the host authorities, the relevant supervisors and the EBA. The college is where the group resolution plan is drawn up, the resolvability of the group is assessed, MREL is set for the group and its entities, and a group resolution scheme is agreed if the group fails. The chosen resolution strategy, single point of entry with resolution concentrated at the parent, or multiple point of entry with several entry points, largely determines how home and host responsibilities interact in practice.

Within the banking union the Single Resolution Board acts as the group-level authority for the significant cross-border groups it is responsible for, coordinating with national resolution authorities. For groups extending beyond the union, cooperation with third-country authorities is handled through crisis-management groups and cooperation arrangements. Where authorities cannot agree, the EBA can play a mediation role.

The definitions of group-level, home and host authorities and of significant branches are set out in BRRD Article 2, and the resolution college through which home and host authorities cooperate is established in BRRD Article 88. The role of national resolution authorities is in BRRD Article 3 and SRMR Article 3, and the Single Resolution Board's function as group-level authority within the banking union is in SRMR Articles 7 and 88.

Practical relevance for banks and investors

For banks, the home-host split determines where resolution decisions are taken and how much local ring-fencing, capital and internal MREL each host entity must hold; a group's structure and strategy are shaped by the need to satisfy host authorities that their entities are separately resolvable. For investors, knowing which authority leads and whether the group follows a single or multiple point of entry approach indicates where losses would be absorbed and which entity's creditors are exposed. The location of the resolution entity within the group is a first-order input to any credit assessment.