On 5 March 2026, the Council of the EU formally adopted the legislative package for the crisis management and deposit insurance (CMDI) framework review in first reading. The formal adoption follows a political trilogue agreement with the European Parliament reached on 25 June 2025.

The legislative package was proposed by the European Commission (Commission) in April 2023. The Commission proposed a significant overhaul of the CMDI framework to address certain shortcomings by making resolution a more practical and consistent option particularly for small banks. The proposals amend the following pieces of regulation:

  • Directive 2014/59/EU as regards early intervention measures, conditions for resolution and financing of resolution action (BRRD). The final text of the adopted amendments to BRRD can be found here.
  • Regulation (EU) No 806/2014 as regards early intervention measures, conditions for resolution and funding of resolution action (SRMR). The final text of the adopted amendments to SRMR can be found here.
  • Directive 2014/49/EU as regards the scope of deposit protection, use of deposit guarantee schemes funds, cross-border cooperation, and transparency (DGSD). The final text of the adopted amendments to DGSD can be found here.

An overview of the original Commission proposals can be found in our previous blog.

Regarding the principal modifications adopted within the CMDI framework, please note the following information:

  1. Key amendments to BRRD

The public interest assessment under BRRD will be revised to mandate that resolution authorities initiate bank resolution whenever any resolution objective is at risk and liquidating the bank through standard insolvency procedures would not accomplish the resolution objectives.

The least cost test governing deposit guarantee scheme (DGS) utilisation in resolution has been streamlined by limiting DGS contributions to the gross covered deposit amount, while maintaining the established super-preference for covered deposits within a more straightforward three-tier creditor ranking system.

Provisions governing DGS utilisation for resolution financing will incorporate explicit sequencing requirements, protective safeguards, and burden-sharing obligations, thereby ensuring that banks’ internal loss-absorbing capacity serves as the primary defence and that taxpayer funds remain adequately protected.

  1. Key amendments to SRMR

Provisions governing DGS access to Single Resolution Fund financing are subject to comparable-and in certain cases more stringent-sequencing requirements, protective safeguards, and burden-sharing obligations as those established under BRRD. The aim is to ensure that banks’ internal loss-absorbing capacity serves as the primary defence and that taxpayer funds remain protected.

The Single Resolution Board’s governance structure will be reformed through additional consultation requirements involving the Board in its Plenary configuration, thereby enhancing the participation of national resolution authorities in the Board’s decision-making procedures.

  1. Key amendments to DGSD

The adopted amendments provide additional parameters for DGS fund utilisation outside resolution contexts. Preventive measures funded by DGS remain at Member States’ discretion. However, such utilisation now requires compliance with additional conditions and protective safeguards, notably the least cost test (LCT) – identical to that applicable for DGS fund utilisation in resolution – which caps intervention to the gross amounts of covered deposits.

Likewise, DGS fund utilisation for alternative insolvency measures becomes subject to the same LCT and additional provisions governing which categories of transfers from the failing institution may be financed by DGS as part of such measures.

Institutional protection schemes recognised as DGS must maintain an ex-ante target level equivalent to 0.8% of covered deposits. Such schemes may temporarily transfer funds to support affiliated institutions’ liquidity and solvency within specified limits and subject to appropriate safeguards. These funds must be reimbursed within seven working days in the event of a payout or a contribution toward the resolution of a credit institution affiliated with such an IPS recognised as DGS.

Next steps

Following the formal adoption of the CMDI package by the Council, the European Parliament plenary needs to adopt the final texts. A plenary vote has been scheduled for 25 March 2026. Following their formal adoption, the three legislative texts will be signed and published in the EU Official Journal and enter into force 20 days later. The amendments to the SRMR will apply from 24 months after the entry into force of the Regulation. Member States will need to transpose the Directives amending BRRD and DGSD into their national laws within 24 months after their entry into force and apply them from the transposition deadline.