4.3.5 The relationship between the BRRD and the SRMR

The scope of the BRRD and the SRMR is partly overlapping. For example, a bank established in a Eurozone Member State is both in scope of the BRRD and the SRMR. The question may therefore arise whether such a bank should be put in resolution under the SRMR or the BRRD. There is no guidance given in respect of the hierarchy of the BRRD and the SRMR. They are both legislative acts within the meaning of Article 289(3) TFEU. One could however argue that the SRMR supersedes national laws incompatible with its substantive provisions, including national law transposing the BRRD in such a way that it conflicts with the SRMR.1 In this view, a bank established in a participating Member State should be put in resolution under the SRMR, and not under the BRRD.

The importance thereof is twofold. First, unlike the SSMR, the SRMR, in addition to institutional aspects, contains substantive law provisions.2 Although the SRMR is allegedly consistent with the BRRD and adapts the rules and principles of the BRRD to the specificities of the SRM,3 there are some important differences in the substantive law provisions.4 For example, the provisions on the financing of resolution in the SRMR differ from the provisions in the BRRD.

Another example is that the SRMR does not provide for the possibility for the SRB or the national resolution authorities to seek funding for a bank in resolution from the Member States through the so-called government financial stabilisation tools. The provision of State aid is however also not ruled out under the SRM.7

Secondly, there may be a procedural impact, since the competent resolution authority8 on the basis of the SRMR may be the SRB instead of a national resolution authority. Whether the competent resolution authority within the SRM is the SRB or the national resolution authority depends on the division of tasks between the SRB and the national resolution authorities as set out in Article 7 SRMR and further discussed in section 4.5.1.1.

Although the SRMR does not provide further guidance as to the hierarchy between it and the BRRD, it does contain certain provisions that cover the relationship between the two legislative acts. First, it clarifies that when the SRB, the Council and the Commission9 exercise the powers conferred on them by the SRMR, they are subject to the delegated acts, and regulatory and implementing technical standards, guidelines and recommendations adopted by the EBA within the scope of the BRRD.10 In addition, when the Commission adopts delegated acts pursuant to the SRMR it has to ensure consistency with the delegated acts adopted pursuant to the BRRD.11

Secondly, it stipulates that national resolution authorities have to exercise their powers under national law transposing the BRRD and in accordance with the conditions laid down in national law when taking the necessary actions to implement the decisions of the SRB or when acting as resolution authority within the SRM. 12 In addition, when implementing those decisions or acting as resolution authority within the SRM, the national resolution authorities have to ensure that the applicable safeguards provided for in the BRRD are complied with.13 This is without prejudice to the SRB, together with the Council and the Commission, and the national resolution authorities applying the uniform rules and procedures that are set out in the SRMR.14