Resolution

The Single Resolution Mechanism ensures a common approach to the recovery and resolution of failing banks and investment firms in the euro area. Latvia, as a member of the euro area, is also a member of the Single Resolution Mechanism.

A resolution action is taken when the resolution authority (the Single Resolution Board or Latvijas Banka) determines that a failing bank cannot initiate the insolvency proceedings without harming the public interest or causing financial instability.

The Single Resolution Fund is a fund made up of the contributions from credit institutions of Member States that belong to the European Banking Union and is intended to be used for the resolution of failing credit institutions in the situation of emergency.

Latvijas Banka, as the resolution authority of Latvia, ensures the accumulation and management of assets in the national resolution fund. This fund is made up of contributions from investment firms.

Latvijas Banka has set the 2024–2026 priorities for resolution and the compensation scheme

The European Union and national laws and regulations on the resolution, National Resolution Fund and investment and deposit protection schemes are grouped in one place.