Bank Resolution in the SSM States (SRM) (Regulation)

Since the Resolution Fund will be dependent on financing from the ESM, the Commission and the Board cannot implement resolutions in a way which is competitively neutral. The Single Resolution Fund for all SSM States promotes Moral Hazard and passes on the resolution risks and costs to all tax payers in the SSM zone. The Regulation cannot be based on the internal market competence (Art. 114 TFEU) but only on the flexibility clause (Art. 352 TFEU) which requires unanimity in the Council. It should be clearly stated that no Member State can be forced to share in the resolution costs, even where the Resolution Fund fails to achieve its target size. Otherwise there would be a violation of the conditions laid down by the Federal Constitutional Court.