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Paolo Fucile

This chapter examines the provision of emergency financial support to credit institutions in light of the EU Banking Union. It focuses primarily on the Single Resolution Fund (SRF) and Emergency Liquidity Assistance (ELA). It begins by outlining the current regulatory framework and thereafter, analyses their reform perspectives. Despite being a first attempt to mutualise risks across the euro area’s financial institutions, the SRF has not yet qualified as the reliable fiscal backstop to the Banking Union; it remains practically dependent on the ESM or its successor. At the same time, there appears to be a significant gap between the full-scale centralisation of prudential supervision on the one hand, and the decentralised model ELA provision on the other. This retains the uncertainty in the division of powers, the nature of such operations as well as the allocation of legal and financial risks connected to ELA operations.