The ECB has published its legal opinion on the Single Resolution Mechanism (SRM), a short summary follows:

• The SRM should include all EU credit institutions
• Resolution should only be triggered by a supervisory assessment of “failing or likely to fail”
• The SRM should not require new legislation, Article 114 of the Treaty should suffice as a legal basis
• The ECB supports early implementation of the bail-in tool (currently 2018)
• Resolution financing must be provided by the Single Bank Resolution Fund. The ECB proposes a “temporary, fiscally neutral backstop” to the SBRF in the form of a credit line supplied by Member States, but recoupable from the financial industry
• The ECB seeks representation as an observer in all plenary and executive meetings of the Single Resolution Board

The opinion voices its full support for the SRM which it views as a necessary complement to the Single Supervisory Mechanism, although it considers…