The European Council agreed a General Approach which will lead to an Intergovernmental Agreement, currently under negotiation. Under the General Approach, the Single Resolution Fund will be built up by contributions from banks over a maximum 10-year period. Should adequate funds not be available, the General Approach states that national authorities should be responsible.
However, the continuation of national funding of resolution has a significant drawback. It implies that the negative-feedback loops which have been experienced between banks and sovereigns will remain. Thus, the issue of whether common backstop arrangements will be in place, both for the transition period and in the steady state, is in question.