In the resolution of a bank, De Nederlandsche Bank (DNB) has recourse to two resolution funds if needed: the European Single Resolution Fund (SRF) and the National Resolution Fund (NRF).
Why resolution funds?
The resolution authorities – DNB and the Single Resolution Board in Brussels – can use the SRF and the NRF under strict conditions, for example to grant loans to an ailing bank, to guarantee assets or to provide capital for a bridge bank. Banks and certain investment firms contribute to the funds.
Single Resolution Fund
The SRF is a European fund and is built up in 8 years (2016-2023) with a target level of 1% of all the money held in payment and savings accounts protected by deposit guarantee schemes in the euro area. According to an estimate of the European Commission, this amounts to roughly EUR 60 billion. This amount is raised by levying (partially risk-based) contributions from the banks and investment firms covered by the Single Resolution Mechanism (SRM). The SRF can be used for all banks covered by the SRM.
National Resolution Fund
This fund was set up in 2015 to finance the application of resolution tools. In 2016 the SRF was established, effectively bringing the Dutch banks under its common European scope. Since then, the scope of the NRF has been limited to investment firms meeting start-up capital requirements and branch offices of non-EEA banks. The NRF is built up over ten years (2015-2024) from fixed (lumpsum) amounts that institutions must pay depending on their contribution base. This fund is ultimately expected to amount to EUR 6-7 million. The NRF can only be used for the institutions that contribute to it. In Dutch, the official name of the NRF is ‘Afwikkelingsfonds’.