The Single Resolution Mechanism (SRM) is a key component of the European Union's banking union, designed to ensure the orderly resolution of failing banks. It aims to minimize the impact of bank failures on the economy and taxpayers by providing a structured process for managing such situations. The SRM works alongside the Single Supervisory Mechanism (SSM), which oversees the stability of banks in the euro area. The SRM is managed by the Single Resolution Board (SRB), which assesses the viability of banks and decides on resolution measures. These measures can include restructuring the bank, selling its assets, or using a resolution fund to cover losses. This framework helps maintain financial stability and protects depositors.