Bank crisis management and deposit insurance reform

When a bank fails, the authorities either wind it up under national insolvency law or place it in resolution, a set of powers that keeps its critical functions running while shareholders and creditors bear the losses. The crisis management and deposit insurance (CMDI) reform changes the EU rules for both paths (European Commission (external site)). It also amends the rules for deposit guarantee schemes, which repay protected depositors when a bank fails.

The reform consists of Directive (EU) 2026/806, which amends the Bank Recovery and Resolution Directive (BRRD) (EUR-Lex (external site)), Regulation (EU) 2026/808 for the Single Resolution Mechanism (EUR-Lex (external site)) and Directive (EU) 2026/804 for deposit guarantee schemes (EUR-Lex (external site)).

Early intervention, the step before resolution, is reworked. The directive notes that "Early intervention measures have seldom been used", simplifies their conditions and removes measures that overlap with supervisory powers (Directive (EU) 2026/806 (external site)).

The supervisor notifies the resolution authority as early as possible when a bank faces a material risk of failure (Directive (EU) 2026/806 (external site)). According to the Single Resolution Board, the reform gives more options for dealing with smaller and medium-sized banks in crisis (SRB statement (external site)). The Commission describes stronger funding for resolution and a simpler hierarchy of claims (European Commission (external site)).

Banks hold a minimum requirement for own funds and eligible liabilities (MREL) that can absorb losses in resolution. New eligibility criteria apply to deposits counted towards it; deposits taken before 12 May 2028 keep counting until 11 May 2029 (Directive (EU) 2026/806 (external site)).

The rules apply to banks in the EU, and to the resolution authorities and deposit guarantee schemes that deal with them (European Commission (external site)). The roles most directly concerned:

• Capital Reporting Analyst: checks which deposits still count towards MREL after the new criteria.
• ALM Analyst: plans deposit funding around the grandfathering that ends on 11 May 2029.
• Regulatory Reporting Analyst: adapts resolution planning reports to the new technical standards.
• Liquidity Risk Analyst: reviews how the new deposit criteria change the stability of the funding base.

The acts were adopted on 30 March 2026 and published in the Official Journal on 20 April 2026 (EUR-Lex (external site)). The Commission states that the reform entered into force on 10 May 2026 and applies from May 2028 (European Commission (external site)).

The European Banking Authority (EBA) is due to submit draft technical standards under the amended BRRD by 11 May 2027 (Directive (EU) 2026/806 (external site)). Member States transpose the directive by 11 May 2028 and apply the measures from 12 May 2028. The grandfathering of deposits ends on 11 May 2029.

For deposit guarantee schemes, the EBA has published a roadmap of twelve regulatory products in three batches (EBA (external site)).

The BRRD and the Single Resolution Mechanism Regulation date from 2014 and were amended in 2019 (Directive (EU) 2019/879 (external site)). The Commission proposed the CMDI reform in 2023 (COM(2023) 226 (external site)).

The aim is to make resolution usable for more banks and to set clearer rules for the use of deposit guarantee scheme funds (European Commission (external site)).