Keynote speech by SRB Chair, Dominique Laboureix at Banca d’Italia - "The Banking Union – Achievements and the road ahead"

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The Banking Union – Achievements and the road ahead

Ladies and gentlemen 

First, let me thank Governor Panetta and our colleagues at Banca d’Italia for inviting me here today for this event, which is especially important to me.

Indeed, this conference, in a way, closes the cycle of celebrations for the 10 years anniversary of the Single Resolution Mechanism. 

The Single Resolution Mechanism is a new chapter in the long story of financial crises and the people, and institutions, that put them out over the years.

One can say that it is a global story, as financial crises do not stop at borders. 

At the same time, it is also a very local story. It is about consumers, critical functions, confidence. This is true here in Italy as in any other country. 

Our anniversary is, above all, a celebration of a wise policy decision: be prepared for the next banking crisis. 

Today, I would like to discuss four items with you: 1. The development of the resolution framework; 2. What remains to be done; 3. The relationship between resilience and competitiveness and 4. The road ahead towards a complete Banking Union.

1. The development of the resolution framework 

The creation of the Financial Stability Board and of the Key Attributes marks a turning point in global financial regulation. 

The Single Resolution Mechanism - in charge of implementing the European “translation” of Key Attributes - stands strong as the second pillar of the Banking Union, ensuring that failing banks can be resolved effectively with minimal impact on taxpayers and the broader economy. 

Let me remind you: the resolution framework and the SRM started as ideas on paper—highly theoretical, and many doubted they could ever work. Back then, this set us apart from the first pillar of the Banking Union, which mostly followed existing systems.

The vision was bold: move away from costly government bailouts, which had drained taxpayers during the financial crisis, and handle banking crises at the European level in a structured way—without relying on public funds.

The SRM—through the SRB and the NRAs—turned that vision into reality. In just a few years, it resolved several banks without using a single euro of taxpayers’ money. The resolutions of Banco Popular in 2017 and Sberbank Europe in 2022 were true milestones for the Single Resolution Mechanism.

Yet we should also remember that Banca d’Italia was leading the resolution effort even before the SRB. The 2015 resolution of four Italian LSIs was, in fact, is early proof that those newly minted resolution tools could work effectively.

This first decade saw the SRB and NRAs putting flesh on the bones of the EU’s resolution framework, making resolution a truly credible option in a crisis. Some key milestones include:

• More than EUR 2.6 trillion of loss absorbing capacity, built by banks in the Banking Union. 

• EUR 80 billion of Single Resolution Fund ready to be deployed.

• About 150 operational and actionable resolution plans drafted and updated every year for significant and less-significant institutions. 

These achievements are concrete proof of the SRM’s contribution to Europe’s financial stability. Together with the Single Supervisory Mechanism, we built true resilience in the system.

2. What remains to be done

By all means, the crisis management framework, albeit advanced, is not complete and neither is its implementation. 

Let tell you about our work on our implementation side through two non-exhaustive examples. I am sure that the excellent panels of this conference will cover many more.

First, we need to make sure that bail-in works everywhere. 

The operationalisation of the bail-in tool in a cross-border context, where loss-absorbing instruments are issued in a foreign jurisdiction and/or held by non-domestic investors, must be further developed.

Compliance with applicable securities laws – such as those of the US one – can pose challenges in some cases. In this regard, the SRB is working intensively at various levels, from the FSB to individual banks.

The FSB has also set up a task force including resolution and securities authorities to address this issue.

As a second example of our implementation work, I want to highlight the importance of developing optionality in our resolution strategies. This means being ready to deploy any tool at our disposal - both alone and in combination - for any bank in crisis. 

In fact, one of the key lessons from Silicon Valley Bank and Credit Suisse is that also larger banks can be sold. If a bank is well-prepared and the price is right, large banks can also be marketed. Our strategies should then be nimble. Optionality and agility are of the essence in a crisis.

This is why, it is important to develop variant resolution strategies alongside our preferred ones.

We should operationalise all available tools. For me, “operationalising” goes beyond building a tool’s technical features. It also means putting it to the test. In that spirit, we recently published two guidelines: one on resolvability self-assessment, and one on testing.

Clearly, also our framework - the architecture of the Banking Union – remains incomplete. I will circle back to this in a minute.

3. Resilience and competitiveness

Moving on to my third topic of today. How to strike a balance between simplification and resilience?

As the memory of past crises wanes, calls become louder to start balancing out resilience with competitiveness.

This debate is currently unfolding under many different banners: modernisation, simplification, regulatory streamlining, competitiveness – and, of course, deregulation.

I think we can all agree that we want a modern, simple, and streamlined framework that makes banks competitive – but still resilient.

That is the clear first and best outcome. Unfortunately, in our line of work, we do not deal in absolutes. There are no first bests. Everything is relative – everything is a trade-off.

And it is in those trade-offs that all the problems lie. One requirement less here generally means a bit more risk there. That’s where views diverge and where consensus quickly evaporates.

There is no optimal point at which to set the dial between risk and resilience – and this simplification exercise, or whatever we call it, is precisely about deciding where to put that dial.

I don’t claim to have an answer to that question. But I can share some insights from our field when it comes to moving that dial.

First, resolution is a relatively new field. This means that the framework is, by definition, less layered than, say, prudential regulation – but also that, in many instances, as I mentioned before, it is not yet fully implemented nor in Europe, nor across the globe. 

Second, resolution is a single-shot gun. Successful resolutions are only possible if the 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. For this reason, we must be extremely careful when simplifying not to lower standards. 

Third, all financial regulation is interconnected. TLAC is a function of risk-weighted assets. MREL is a function of capital requirements. This calls for a holistic approach to any review. In fact, it’s very good news that the ECB Governing Council took a similar view in their high-level policy recommendations for simplification published yesterday. Just a reminder from experience: easier said than done.

Nevertheless, it is important to regularly ask ourselves how to become more efficient, more modern or simpler. This is why the SRB, together with the NRAs, is working intensively in streamlining our work and our request to the banks. This is exactly in line with the ECB’s report entitled “Streamlining supervision, safeguarding resilience” report that was also published yesterday.

To conclude, we may be in the peculiar situation of having a framework that is at the same time incomplete, not fully implemented but at the same time too complex.

Maintain resilience, increase competitiveness, reduce complexity and complete the framework… how to have it all at once? 

4. The road ahead towards a complete Banking Union

To answer this question, I will have to move to my fourth item, and last item: the road towards a complete Banking Union.

One rulebook is simpler and safer than 27. One market offers more opportunity than 27. Resilience is not compromised moving from 27 to 1. 

In that sense, moving towards greater integration within the Banking Union, and the European Union, would be the most impactful course of action but, of course, it requires political will. 

We should not forget that a fully-fledged Banking Union is critical to underpin a common currency. Let me quote President Draghi on this one: “Financial integration is essential for a well-functioning single currency […] Incomplete financial integration is an Achilles heel […]. With the banking union, I am confident we are laying the foundations for more complete financial integration in the future.”[1]

This was not the famous Draghi report. It was a speech from 2014. Clearly, these are not new problems.

Fortunately, the Crisis Management and Deposit Insurance package (or CMDI) is a key step in the good direction.

In fact, [as the Governor mentioned], the colegislators are now in the process of finalising its Crisis Management and Deposit Insurance (CMDI) framework. 

CMDI is also an important stepping stone for advancing the broader agenda of completing and deepening the Banking Union. Once this important reform is in place, we’ll be better positioned to tackle the remaining building blocks. These are:

• One. A European Deposit Insurance Scheme (EDIS). Actually, maybe one could think of a different name for a fresh start. The goal though should not change. This tool should provide equal protection for all depositors across the Banking Union, reinforcing trust in the system regardless of where a bank is located;

• And, two, a credible framework for a liquidity backstop, which is essential to maintain market confidence and financial stability at the critical moment when resolution is triggered. On this, I must mention that I still hope the last Member State yet to ratify the ESM treaty revision will do so soon. 

The lack of a common deposit insurance and of a public liquidity backstop have been highlighted in a recent IMF FSAP report and sets the Banking Union apart from the US, the UK, and – soon enough – Switzerland.

We must work further on this issue, both at the international and European levels.

In case you are not sure whether the completion of the Banking Union should be a priority for all of us, let me read you a passage of a letter (dated 04 November 2025) written by US Senator Warren and others to the Vice Chair for supervision at the US FED – Ms Bowman. 

“Europe is not a single country. It may be advancing a “European Banking

Union” project, but that effort is far from complete. Europe does not yet have a unified deposit insurance framework, nor a mechanism to provide liquidity in periods of banking stress.”[2]

This argument is used to ask that European banks are stripped of a favourable capital treatment – agreed at the Basel Committee – that hinges on us being a single jurisdiction. 

It is hard to make it clearer than this: fragmentation costs, sometimes, much.

Fragmentation is not only eliminated by completing the Banking Union but also tearing down the many remaining internal market barriers. Capital and liquidity should flow more freely within the Union. Banks should be free to integrate within the Banking Union, to thrive and, yes, to fail if not competitive enough.

As long as we operate through fragmented frameworks and legacy national complexities, we limit scale, increase costs, and blunt Europe’s competitiveness. 

Today, however, the Banking Union has earned trust both at home and abroad: its supervisory credibility is solid, its crisis-management tools are understood, and its safeguards are proven. 

With a mature central supervisor and resolution authority, and with cooperation with national authorities now well-developed at all levels, the old home-host divide increasingly feels like a legacy issue rather than a necessary safeguard.

This should give us the conditions to complete the journey — to streamline rules, remove duplications, and let banks operate seamlessly across borders. A fully fledged Banking Union is not an abstract ambition; it is the logical next step to deliver efficiency, stability, and strategic strength for Europe’s financial sector.

5. Conclusions

Let me conclude. 

The Single Resolution Mechanism has proved its fundamental value year after year. I like to think that, besides maintaining financial stability in crisis times and fostering resilience in calm times, we are also a driver of integration. By cooperating and building a common supervisory culture we bridge the distance and the diffidence that too often divides within Europe. The future of the Single Resolution Mechanism will be all about taking this cooperation to the next level.

The completion of the Banking Union is ultimately a competitiveness driver conjugating resilience with competitiveness. In fact, resilience is not a constraint on competitiveness — it is what sustains it through the cycle. 

If you have the right tools to manage a crisis, you emerge from it faster, with fewer scars and fewer distortions to the level playing field. 

With a fully equipped framework for resolution and crisis handling, we can both safeguard stability and open the door to a simpler, more competitive regulatory environment.

For once, we can both have our cake and eat it. Let’s seize this occasion.

Grazie.