The Single Resolution Mechanism (SRM) became fully operational on 1 January 2016 and will bolster the resilience of the financial system and help avoid future crises by providing for the timely and effective resolution of cross-border and domestic banks.

Senior bondholders and depositors over €100,000 will be in line to be “bailed-in” if a bank goes bust, a departure from the mass government-funded rescues seen in Ireland, Portugal, Spain and Greece in the wake of the financial crisis, the Telegraph mentions.

“We now have a system for resolving banks and of paying for resolution so that taxpayers will be protected from having to bail-out banks if they go bust”, said Commissioner Jonathan Hill.