[Check against delivery]
Ladies and gentlemen, first, let me thank Maciej and Eva for inviting me here today. I would like to also praise the BFG and IADI for the organisation of this topical event.
Today, before delving into how we can make the most of CMDI and discussing other policy topics that touch upon our work, I would like to give you a snapshot of what we did in these 10 years and what we have we have in store for some years ahead.
1. A brand-new framework
This year, the Single Resolution Mechanism and the Single Resolution Board are celebrating their 10th anniversary.
Next year, also the BFG will celebrate its 10 years as Poland’s resolution authority. Of course, BFG existed since the nineties as the Polish deposit guarantee scheme. As we all know, we celebrate today the BFG’s 30th anniversary.
The “10 years mark” is a good time to take stock.
In the last 10 years, resolution authorities, like the SRB or the BFG, and the frameworks that underpin our work have substantially contributed to preserving financial stability in the European Union and, really, anywhere.
Our framework had to be built from scratch. We started from a (very) theoretical idea of dealing with bank crises to protect financial stability without using public money – without “bail-outs”.
And, only a few years later, we did just that. We resolved banks without using one euro of public funds while protecting European financial stability.
Resolution authorities contributed to European (and global) financial stability mostly actually in two ways.
The first one, resolving banks during a crisis, is more evident. Banco Popular, Sberbank - and Getin Noble here in Poland- are our headlines cases. Fortunately, though, banks crises are rare enough.
The second - resolution planning - is more subtle contribution to financial stability but equally important.
In fact, our day-to-day work builds resilience into the system. Asking banks to be ready to handle crises helps strengthening financial stability.
Too often, this progress goes unnoticed.
European banks are more resilient today thanks, in part, to that planning, to the existence of the Banking Union, and to tools like the EUR 80 billion Single Resolution Fund (SRF). Over the past decade, banks and authorities have built real capabilities and loss-absorbing capacity – and that has made a difference.
It’s no coincidence that European banks withstood the 2023 turmoil. And , as said, when action was needed to preserve financial stability, we stepped in – and resolved the banks in crisis. Again, at zero cost to taxpayers.
2. CMDI
Back in 2022, the Eurogroup put out an important statement taking stock of where we stood on crisis management.
Interestingly, one of the most relevant conclusions of this statement did not come from a resolution that we executed but rather from failures we did not handle under this framework.
The Eurogroup – I am paraphrasing – concluded that resolution works well and that it should be used even for smaller banks, when it is about preserving financial stability.
The 2023 Commission’s crisis management and deposit insurance review proposal - or CMDI – was the European Commission answer to this Eurogroup political request.
In nature, the proposal was very simple:
Ensure that more banks can be included in the resolution scope;
Potentially mobilise DGS funds, when needed to protect depositors of these smaller institutions outside of the traditional pay-out function in liquidation
Now, two and a half years later, this proposal is finally becoming a law, subject to the last technical discussions under the Danish Presidency.
The Polish Presidency and the BFG, strong of its vast experience in crisis management, were strongly supportive of this package in the face of strongly opposed views. Their impressive work was critical to deliver the CMDI political agreement. I can only commend this success.
To be honest, the proposal lost some of its original purpose in the process. For instance, the expansion of the scope of resolution will probably not happen as ambitiously as in the Commission’s proposal.
However, as Jurand mentioned in his keynote, it delivers a good new tool – the DGS bridge - that resolution authorities can use when needed.
Are we going to use the bridge anytime soon? I am not sure.
Why? For two reasons:
First, because we will only be able to use this tool on banks already earmarked for resolution and specifically the sale of business tool. So, these banks will have already been requested to work on their resolvability - build their MREL buffers and so on. That means that the recourse to the bridge the gap tool will be really exceptional, as we will require the banks to be equipped on their own. This is a safeguard that I always supported – from the very beginning.
The second reason are the many safeguards that were added during the negotiations. And, I was not in favour of many of those. The sheer amount of these safeguards, even if lower than in an earlier version of the text, is especially surprising when comparing to the similar tool that the UK has developed, which instead is extremely flexible.
However, today, let’s stay optimistic: I would like to underline that the CMDI deal also showed that there is a majority both in Parliament and in Council that is willing to advance towards a more complete Banking Union and towards more resilience against financial shocks.
I have been asked to discuss how we should unlock the potential of CMDI.
I think that now it is time to focus on CMDI’s transposition and implementation. This will take the whole next two years and it will not be straightforward.
Let’s use this time efficiently. We need to work on operationalising the DGS bridge together with all stakeholders involved - the DGSs, the NRAs and more.
The beginning of this new workstream is very good news. I have said in many occasions that crisis management authorities should work seamlessly in a continuum if they want to develop a real level of trust.
With the SSM and the NRAs, we have achieved this level cooperation.
We should aim at cooperate with DGSs in a similar manner.
Let’s be clear, this will take time but it should be the right direction of travel.
Let me take a brief detour. IADI’s review of its core principles, which we at the SRB have followed closely, points clearly to one thing: more cooperation. The new principles put greater weight on coordination among financial safety-net players and resolution authorities. They call for stronger information-sharing and closer ties between resolution authorities and deposit insurers.
It is good to see that this push for cooperation comes from both sides.
3. Beyond CMDI, a complete Banking Union
Beyond CMDI, I would like to mention 3 topics: EDIS, simplification and implementation of our strategy, Vision 2028.
3.1 EDIS
Let me start by EDIS.
The same Eurogroup statement I mentioned above charted a path towards the completion of the Banking Union, with CMDI being the first step.
Now, it is time to close all those gaps that separate us from a complete Banking Union that is a true single market for banking services.
A European Deposit Insurance Scheme is still the third missing pillar of the Banking Union. This proposal is now more than 10 years old. But, with everything changing nothing has changed. We still need it!
Very simply, the European banking landscape is evolving.
At the end of last year, a large European online bank, established in a small EU Member State, announced it had reached three million clients through its branches in a host Member State – a country of five million people.
The covered deposits of these clients are currently protected by the deposit guarantee scheme of the bank’s home country. In a Banking Union with European supervisory and resolution authorities in place, this national responsibility looks increasingly misplaced.
Such large figures and growing interconnections call for a European solution.
I hope the colegislators will reopen soon this important debate.
3.2 Simplification
Lately however, most of the attention has been on simplification with some stakeholders even calling for a roll-back of bank regulation.
Let me be clear: of course, our framework is complex.
I wholeheartedly welcome the simplification efforts from all stakeholders.
It is our duty to ensure that banks, and the public at large, get more bang in terms of financial stability for their buck spent on resolution planning.
But let me give a few words of caution.
Successful resolutions are only possible if our framework is credible. There is no such thing as a 50 percent successful resolution. If the right capabilities are not in place, the bank is not resolvable – full stop. There is nothing we can do about it! In that sense, we need to be extremely careful when simplifying not to lower standards. We do not want to feel that cliff effect.
We should not forget that the complexity of our system does not stem from bulky European regulation alone but also, and sometimes, even more, from the lack of European integration. One rulebook is simpler than 27.
In addition, banking regulation does not happen in a vacuum. It should be put in a broader context. Sudden windfall taxes, governments setting up barriers to bank integration and wildly differing macro-prudential requirements between Member States are certainly not simplifying the banks’ landscape.
Even when we manage to deliver a European framework, it tends to be complex largely due to compromises. Europe is a diverse place. Diversity brings resilience and richness but laws eventually become complex in order to cater to everyone’s perspective.
There is a time factor to consider. We need to be competitive now. Not in 2030 or beyond. As such, musing about reforming the whole capital stack in a short amount of time is not very realistic.
In particular, reforming the capital stack in depth could mean revisiting international standards like Basel III or the FSB’s Key Attributes. Even if that were the right path — which is debatable — changing and implementing such standards could easily take a decade.
Perhaps, there are quicker solutions that we can find within the EU framework.
To be clear, most of the achievable improvements have to do with the many cumulative, often contradictory buffers that banks need to respect. More simplicity, consistency, visibility and harmonisation in the rules and the way buffers are applied would certainly add value.
This is, ladies and gentlemen, working towards a more European approach. This said, I want to remain realistic, an EU legislative process is not simple by definition and, as we have seen, if we look at CMDI, its results are not always simple either.
In my view, true simplification can only be achieved by working towards a Single Market for banking service – a deeper Banking Union.
A complete Banking Union could deliver tremendous simplification and growth. Funds should flow freely within the Union. Depositors and clients should feel equally protected irrespective of the size of a country and banks should be able to operate and grow cross-border.
A more complete and effective Banking Union would also be a more compelling proposition for those countries that have not joined yet. Of course, this is for Poland and the other non-participating Members States to decide.
We should make sure that European rules, including of the Banking Union, are as simple and fit-for-purpose as possible but the direction should always be towards more harmonisation, more cooperation and, ultimately, more Europe!
4. Implementing Vision 2028
Back at the SRB, we are working towards simpler and more effective resolution plans.
In recent months, we have streamlined the process, cutting plans from hundreds of pages to about 50, with annexes only where needed. Shorter, more focused plans mean less reporting for banks and allow us to put more resources where they matter most, following a risk-based approach. This frees up capacity to advance long-term priorities, such as operationalising transfer tools and increasing optionality in resolution.
We are also making our requests more concrete. No longer abstract “expectations,” but clear, actionable “capabilities.” To ensure these are tailored to each bank, we are pivoting towards more testing—through self-assessments, deep-dives, and on-site inspections. This is about going door-to-door to see what is still missing for each institution to be truly resolvable.
While this may feel like change, it is in fact about creating a more stable and predictable framework. Our MREL policy, for example, has now stabilised. Of course, if new risks, rules, or tools emerge, we will adapt. But at our current level of maturity, we see no need for major annual shifts.
Here, evolution—not revolution—is the key word.
One area which is evolving is our resolvability assessment.
First, it’s important to clarify that we do not want to come up with new expectations. The target of the work we are doing with resolvability assessment is twofold:
Banks have been given a lot more transparency on our resolvability assessment methodology. This transparency gives banks predictability and allows them to focus on testing their resolvability in a consistent way.
We have been publishing for consultation a series of guidance papers, most notably one on valuation on which we are finalising the outcome of the consultation now, that should help bank navigate our resolvability expectations. The idea here is not to add to the “to-do” list but rather to clarify the tasks that already are in the list.
We think that these adjustments will deliver better resolvability results.
Let me briefly mention another important workstream of the strategic review.
It is critical that the authorities of the Banking Union and of the European Union cooperate well, trusting each other, so that everyone can trust our system.
Thanks to the SRM Vision 2028, we are taking our cooperation to the next level.
NRAs are becoming even more involved in our governance and in our policy-making. For instance, NRAs start working since the very beginning on the drafting of our policies.
Ideally, in the eyes of our stakeholders, the Single Resolution Mechanism should work in close cooperation also – as much as possible - with the other European authorities.
Banks operate across borders and a resolution is truly successful if, and only if, it preserves financial stability everywhere. For this to happen, all authorities should be aligned. This is why, for me, it is so important to visit European countries that are not part of the Banking Union. Our relationship with the local authorities is of the utmost importance.
Even more important are the resolution colleges in which joint decisions are elaborated, bank by bank.
Our relations with BFG (and KNF) are a great example of how cooperation and open communication build mutual trust in time. Since the inception of the SRB, we have had discussions, sometimes not easy, with our Polish counterparties. It is part of the process. These discussions bore fruit. At all levels, we work together, seamlessly, and we are more ready than ever to deal with a cross-border crisis if and when the times come. By working together, we have learned how to trust each other.
5. Conclusions
Let me conclude.
Over the past ten years, the main challenge of the Single Resolution Mechanism was to put into practice a framework that, at the start, was mostly theoretical. I believe we can say we have succeeded—building resilience through resolution planning and resolving banks when needed.
With CMDI near to completion, it is time to look ahead. The SRB, and the SRM as a whole, stand ready to work with the DGSs to implement CMDI once it will be finalised. More broadly, we will work towards completing the Banking Union—by building trust through solid work, close cooperation, and constant vigilance against new risks.
Thank you for your attention today.
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