Resolution and crisis management

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The Bank of Italy is the country's resolution authority and is in charge of resolution and crisis management for banks and non-bank intermediaries as entrusted to it by national law (Legislative Decrees 180 and 181 of 16 November 2015) transposing Directive 2014/59/EU (the Bank Recovery and Resolution Directive, 'BRRD') and subsequent amendments, in accordance with EU law. Within the Bank of Italy, this function is entrusted to the Resolution and Crisis Management Unit.

Since January 2016 these tasks have been performed in the context of the Single Resolution Mechanism (SRM), which complements the Single Supervisory Mechanism (SSM), introduced by Regulation (EU) No 806/2014 to ensure the orderly and centralized management of crises involving significant credit institutions or those with cross-border activity within the euro area, as well as investment companies and financial entities that fall under the scope of application of the SSM. The SSM is supported by a Single Resolution Fund, funded through contributions from the intermediaries subject to the SRM to be paid over eight years, and is made up of the Single Resolution Board (SRB) and the National Resolution Authorities (NRAs). If a resolution action is initiated, the European Commission and the Council of the European Union may also intervene.

What happens when a resolution action is initiated under the Single Resolution Mechanism

The Bank of Italy plans how crises are managed by preparing, in cooperation with the Single Resolution Board for significant intermediaries or independently for less significant banks, resolution plans that focus on identifying the critical functions, assessing and addressing any obstacles to resolution, establishing an adequate level for the minimum requirement for own funds and eligible liabilities (MREL), and selecting the strategy and resolution tools to be used in the event of a crisis (Article 3 of Legislative Decree 72/2015). In the event of a crisis involving a significant bank, the Bank of Italy is also responsible for carrying out the resolution plan drawn up and approved by the Single Resolution Board; instead, for Italian less significant banks, the Bank of Italy prepares the resolution plan for approval by the Minister of Economy and Finance (MEF) and implements it.

In its role as national resolution authority, the Bank of Italy participates in the European Banking Authority's (EBA) Resolution Committee, established by the BRRD, and the Single Resolution Board; it also cooperates with national institutions (MEF and Consob) including by signing special collaboration agreements (Framework agreement between the Bank of Italy and Consob for cooperation and coordination in the performance of their respective functions, only in Italian), European authorities (Single Supervisory Mechanism and European Banking Authority) and international bodies, such as the Financial Stability Board (FSB).

Finally, the Bank of Italy manages the National Resolution Fund, collects the contributions to the Single Resolution Fund on behalf of the Single Resolution Board, carries out and oversees the compulsory administrative liquidations of banks and financial intermediaries and exercises supervisory powers over the deposit guarantee schemes that were attributed to it by the Italian legislation transposing the relevant EU legislation (Legislative Decree 30/2016, implementing Directive 2014/49/EU, the Deposit Guarantee Schemes Directive - DGSD).

The Bank of Italy reports to the general public on the performance of its resolution and crisis management functions and on its supervision of the deposit guarantee schemes through various forums and channels, including the Bank's Annual Report, the Report on Operations and Activities and the Annual Report of the National Resolution Fund.

Related Topics

National Resolution Fund - Annual Report

The National Resolution Fund was established by the Bank of Italy pursuant to Article 78 of Legislative Decree 180/2015.

Supervisory guidance

The documents in this section relate to: i) the procedures followed by the Bank of Italy to implement in Italy, for those matters for which it is competent, the guidelines and recommendations issued by the European supervisory authorities; ii) the guidance that the Bank of Italy issues on its own initiative to address questions as to the interpretation and application of the supervisory provisions.

Banking and financial supervision

The Bank of Italy's supervisory functions in the banking and financial sectors extend to banks and non-bank financial intermediaries listed in the relevant registers. Since November 2014 bank supervision has been conducted within the context of the Single Supervisory Mechanism.