Topic Recovery/resolution Resolution
BaFin has been Germany's national resolution authority (NRA) since 1 January 2018. The legal basis for this is the German Recovery and Resolution Act (Sanierungs- und Abwicklungsgesetz – SAG).
From 2015 to 2017, the Federal Agency for Financial Market Stabilisation (Bundesanstalt für Finanzmarktstabilisierung – FMSA) acted as Germany's national resolution authority.
As a resolution authority, BaFin is part of the Single Resolution Mechanism (SRM). The SRM consists of the Single Resolution Board (SRB) based in Brussels and the national resolution authorities of participating Member States. In addition to the SRB, the Single Resolution Fund (SRF) was established as the second core element of the SRM. The SRF is financed by bank levies.
Tasks of the NRA
The NRA has extensive powers to resolve institutions in an orderly manner. These powers include, in particular, the following tools: bail-in of shareholders and creditors, sale of business, transfer to a bridge institution and transfer to an asset management company.
The NRA prepares resolution plans for institutions and assesses their resolvability. Resolution plans for significant institutions are prepared together with the SRB. If an institution is showing signs of distress, the NRA prepares resolution measures and implements these if necessary.