How single point of entry works

Single point of entry (SPE) is one of the two principal group resolution strategies. Under an SPE approach, resolution tools are applied at a single resolution entity, typically the ultimate parent or a holding company at the top of a resolution group. Losses arising anywhere in the group are passed up to that entity, where they are absorbed by writing down or converting its capital instruments and eligible liabilities through the bail-in tool. The recapitalisation generated is then downstreamed to the operating subsidiaries, which continue to operate without themselves entering resolution.

The mechanism relies on internal MREL: subsidiaries issue loss-absorbing capacity to the resolution entity, so that a subsidiary's losses are pushed up to the top and the recapitalisation is pushed back down, all without opening separate resolution proceedings at the subsidiary level. This is why external MREL under an SPE strategy is concentrated at the resolution entity, while other group entities hold internal MREL.

When SPE is preferred

SPE tends to suit groups that are highly integrated operationally and financially, where funding, management and services are centralised and where it would be difficult or damaging to separate parts of the group in a crisis. Concentrating resolution at the top allows the whole group to be stabilised in a single, coordinated action, which can be simpler to execute and better for maintaining critical functions across an integrated business.

SPE contrasts with a multiple-point-of-entry strategy, in which resolution is applied at more than one resolution entity and parts of the group are resolved separately. The choice between the two is made in the resolution plan and depends on the group's structure, the location of its critical functions, and the feasibility judged by the resolvability assessment. The two strategies are not mutually exclusive across a very large group, but each resolution group has a defined approach.

SPE is a strategy constructed within the BRRD framework rather than a single defined term. It is developed through resolution planning (BRRD Articles 10-14; SRMR Articles 8-9) and executed principally through the bail-in tool (BRRD Articles 43-44). It depends on the definitions of resolution entity and resolution group and on the MREL regime as amended by Directive (EU) 2019/879, in particular the distinction between external MREL for resolution entities and internal MREL for other entities under BRRD Articles 45 and following, with internal MREL addressed in Article 45f.

Practical relevance for banks and investors

For banks, an SPE strategy shapes group structure and issuance: loss-absorbing instruments are issued externally by the top resolution entity, and internal MREL is calibrated to move losses and recapitalisation vertically through the group. Operating subsidiaries are structured to be kept open.

For investors, SPE means the resolution entity's capital and MREL-eligible bonds are the front line of loss absorption, while creditors of operating subsidiaries are comparatively insulated because those entities are intended to stay out of resolution. Identifying whether a bond is issued by the SPE resolution entity or by a shielded subsidiary is therefore central to assessing its risk. See also multiple point of entry and resolution strategy.