BRUSSELS, July 14 (Xinhua) -- The Council of the European Union (EU) on Monday adopted a regulation of establishing a single resolution mechanism (SRM) for failing banks.
The creation of a SRM -- with a central decision-making board and a single resolution fund -- is intended to ensure the orderly resolution of failing banks without recourse to taxpayers' money across participating member states, according to a Council statement.
The SRM will form one of the key elements of Europe's banking union, along with the single supervisory mechanism that entered into force in November.
It will cover all banks established in the euro area and in other EU member states that choose to participate.
The SRF will be built up over a period of eight years to reach a target level of at least 1 percent of the amount of covered deposits of all credit institutions authorized in the participating EU member states. It is estimated that this will amount to about 55 billion euros (76 billion U.S. dollars).
Adoption of the regulation follows an agreement reached with the European Parliament at first reading in early April.