What changes has joining the SRM brought to credit institutions and what to national resolution authorities, i.e. to the Croatian National Bank?

Published: 3/6/2020 Modified: 17/5/2022

Joining the Single Resolution Mechanism (SRM) has not brought any significant changes to credit institutions headquartered in Croatia. This is because the Republic of Croatia has been gradually and continuously aligning its legislation with the EU legislation ever since EU accession on 1 July 2013 when Croatia gained full EU membership. Therefore, joining the SRM is just one more step in that direction. As regards resolution powers over credit institutions, at the time of joining the SRM Croatia has been fully aligned with all the relevant European legislation in that area.

Most credit institutions that are members of groups in the EU already had the Single Resolution Board (SRB) as the group level resolution authority before joining the SRM. Therefore, these credit institutions are already familiar with the work of the SRB and its key procedures and methodologies. In that sense they will not face any significant changes in their operations.

Credit institutions that do not have the SRB as the direct resolution authority, i.e. those credit institutions that are under the direct responsibility of the Croatian National Bank (CNB), have also not experienced any significant changes on operational level. The reporting and communication systems in place between the CNB as the resolution authority and credit institutions have remained the same.

After Croatia joined the SRM, only the role of the CNB as the resolution authority partly changed. The most important change has been that the CNB representatives begun directly participating in the work and decision-making of the SRB. Namely, the CNB representative participates in the plenary sessions of the SRB as a full member along with the representatives of other participating Member States, as well as in the executive sessions of the SRB in the cases provided for by the Regulation (EU) 806/2014 or when it is decided on resolution issues related to credit institutions headquartered in Croatia.

After Croatia joined the SRM the role of the Croatian Deposit Insurance Agency (CDIA) also changed. The CDIA is obliged, like the CNB and the national resolution authorities in other member states, to harmonize all its important decisions and methodologies with the SRB. Operationally, the most important change is that the CDIA continues to collect annual contributions from credit institutions headquartered in Croatia in the same way it had done before Croatia joined the SRM, but this time it does so in accordance with the instructions from the SRB and the amounts collected are transferred to the account of the Single Resolution Fund (SRF).