This technical note was prepared by David Hoelscher (IMF consultant), part of the Spain FSAP 2017 team led by Udaibir Das. The analysis has benefitted from discussions with the staff of the Ministry of Economy and Justice, the Spanish Treasury, the Spain FSAP team, and reviewers at the IMF.
For a description of the resolution of the Spanish banking crisis from 2009 to 2012, see the Spain FSAP 2017 Technical Note on Impaired Assets and Nonperforming Loans.
The SRB can also request the ECB to review a financial entity to determine if it is F/LF and the ECB must respond within three days. If the ECB, within three calendar days upon receipt of that information, does not make such an assessment, the SRB may also make it.
Typically, the IRTs are led by staff from the SRB, with two or three members of the BdE and several staff from the FROB.
IRTs are only used for SIs. FROB ensures coordination and consistency for LSIs.
In the European context, the SSM is responsible for determining if an institution is F/LF but the SRB has the authority to trigger resolution independently from the SSM. In Spain, the FROB does not have such independent
In a single-point-of-entry resolution model, the holding company is intervened at the parent level. It recapitalized and it downstream resources to failing subsidiaries. In a multiple-point-of-entry resolution model, subsidiaries are intervened directly and resolved at the local level.
The FGD can participate in resolution funding with the limits established in its regulation. Specifically, the liability of the FGD in a resolution process shall not be greater than the lowest amount that FGD would have paid in the case of payout, or 50 percent of the target level set for the Guarantee Deposit Compartments.