What it is
The SRF pools the ex-ante contributions of the banking union's banks, raised nationally and progressively mutualised since 2016. It reached its target level — at least 1% of covered deposits in the banking union, roughly EUR 80bn — at the end of 2023, and is owned and deployed by the Single Resolution Board.
What it can and cannot do
The fund is not a bail-out instrument. It may provide guarantees, loans or capital to support a resolution scheme, but capital support is only available after shareholders and creditors have contributed at least 8% of the bank's total liabilities and own funds, and it is capped at 5% of that same base. Its more probable uses are liquidity and guarantees to a bridge institution or purchaser.
The backstop
Since 2022 the European Stability Mechanism provides a common backstop to the SRF, effectively doubling its firepower through a revolving credit line, repayable from subsequent industry contributions.