Keynote speech by SRB Chair, Dominique Laboureix at the Pan-European Conglomerate Club "Resolution for Financial Conglomerates – complementarity, proportionality and cooperation"

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Ladies and Gentlemen, good morning,

Let me first thank the Pan-European Conglomerates Club for inviting me to speak today. It is a pleasure to address you.

This conference is very timely.

We are exactly 85 days away from the Insurance Recovery and Resolution Directive, or IRRD, entering into full application on 30 January 2027.

Naturally, as the Chair of the EU’s bank resolution authority, the Single Resolution Board, I see this as an important milestone – not only for insurers, but for the stability of the EU’s financial sector as a whole.

Banks and insurers have different business models and resolution needs. Therefore, it makes sense for each sector to have its own distinct framework. But when banking and insurance activities coexist within one group, important questions arise about how these frameworks interact and how they can work effectively together.

Today, I want to explore these questions and share my initial thoughts with you.

In my view, there are three key principles to ensure that resolution frameworks work effectively together when a financial conglomerate comes under stress: distinct complementarity, proportionality and cooperation.

I. Complementarity

My first principle is complementarity via two distinct frameworks.

The entry into application of the IRRD is a welcome development for financial stability.

It extends the recovery and resolution framework to insurers, complementing the frameworks already established for banks and central counterparties in the EU.

This is important because financial crises rarely remain confined to a single institution, market or jurisdiction. Distress quickly spreads across borders and sectors, undermining confidence in the financial system as a whole.

Most of you will recall how the 2008 financial crisis unfolded. Shortly after Lehman Brothers failed, shockwaves spread throughout the global financial system. 

AIG, one of the world’s largest insurers, was pushed to the brink of failure. Because its failure would have taken down a dozen more banks, AIG received a 182 billion US dollars bailout – the largest single corporate bailout to this day.

The crisis demonstrated just how interconnected our financial system is. It showed that crises do not respect sectoral boundaries. Neither should our preparedness.

The IRRD addresses the gap in the regulatory framework that became apparent after the global financial crisis, when reforms focused largely on banks.

By extending the framework to insurers, the IRRD broadens the coverage of systemic actors and contributes to levelling the playing field.

More importantly, it strengthens the resilience of the EU financial system as a whole, helping to prevent crises from spreading from one sector to another and ensuring that failures can be managed in an orderly and confined way.

But why have two frameworks instead of one to rule them all? Are we not adding complexity?

Banks and insurers perform different economic functions, have different accounting as well as balance sheet structures and face different risks.

The resolution frameworks must reflect these differences, which is why I consider two separate but complementary approaches the right solution, including for financial conglomerates.

Let me explain.

Of course, the IRRD and BRRD share the same foundation. They both draw on the FSB Key Attributes¹ and, in many ways, the BRRD served as a blueprint for the IRRD. Both texts also pursue the same objective: to avoid public bailouts, to protect consumers and to establish predictable mechanisms for managing crises across the EU.

But a shared foundation does not mean identical rules.

In fact, the approaches to resolution are driven by very different considerations.

For banks, time is of the essence. Consider SVB: in just eight hours, SVB received withdrawal requests totalling 42 billion US dollars². Resolution authorities must therefore act swiftly to stabilise and recapitalise a failing bank, preserve its critical functions and protect depositors. As this example shows, they also need sufficient liquidity in resolution, and you know my position here, but this is not the topic for today!

For insurers, the timeline is often longer, reflecting the long-term nature of insurance liabilities and the need to protect policyholders. Accordingly, the IRRD provides for tools such as portfolio transfers and a solvent run-off, which are not part of the SRB’s resolution toolkit.

Finally, bank resolution is centred around the concept of bail-in, supported by pre-positioned loss-absorbing capacity through MREL and for global systemically important banks, also the TLAC standard. The IRRD does not impose an equivalent requirement on insurers, reflecting the fundamentally different strategies and timelines available for their resolution.

These are not minor technical differences. They reflect the distinct realities of two sectors and shape how authorities approach resolution. 

Each framework is tailored to the characteristics of its sector and provides the appropriate tools to manage the failure of a bank or an insurance undertaking. Bringing them together into a single approach would only add complexity and risk undermining the ability of authorities to act effectively within their respective mandates.

My point is that, in the vast majority of scenarios, the BRRD and the IRRD provide the right tools to manage the individual failures of banks, insurers and financial conglomerates. 

I will return later to the exceptional scenarios in which these tools may prove insufficient. 

But first, let me turn to my second principle: proportionality.

II. Proportionality

According to the Joint Committee of the European Supervisory Authorities³, there are currently 58 financial conglomerates headquartered in the European Economic Area. 

At the SRB, we are responsible for the resolution planning for 27 banking groups, also qualified as conglomerates. 

This experience has taught us an important lesson: proportionality matters.

Although these 27 all qualify as financial conglomerates, their legal structures, organisational arrangements and business models can differ considerably — and these differences have direct implications for how we plan for their resolution.

Broadly speaking, we distinguish between three categories of financial conglomerates.

• First, bank-led groups, where the banking entity acts as the parent and owns the insurance business.

• Second, insurance-led groups, where the insurance undertaking sits at the top of the group and owns the banking business.

• And third, holding-led groups, where a parent holding company that is neither a bank nor an insurer, controls both banking and insurance entities.

I want to pause here for a second to clarify a key point.

When discussing conglomerates and resolution, we should not assume that the failure of one entity – say the banking part – necessarily requires the resolution of the other – the insurance part – or the entire conglomerate. Equally, we should not assume that resolving one entity will leave the rest of the group entirely unaffected.

Our task, as a bank resolution authority, is to understand how the group operates as a whole and what this entails for the resolution of the banking entity. Our intervention focuses on the banking entity and takes place within the framework set by BRRD and SRMR.

In most cases, this is relatively straightforward.

Take, for example, the five largest banking-led conglomerates in France. According to the IMF⁴, banking activities account for between 83% and 91% of the overall business, with the remainder attributable to insurance activities. In such cases, the execution of a group-level resolution strategy by the SRB is unlikely to be significantly influenced by the insurance entity.

However, this is not always the case. The SRB does not necessarily apply resolution tools in the same way across all banking groups.

On the contrary, to ensure proportionality, the SRB tailors resolution strategies to the specific characteristics of each bank and the wider group in which it operates.

Let me illustrate this with an example.

Transfer strategies are a common resolution tool. To make them work, the SRB asks banks to assess in advance which activities can be separated in the event of a sale, transfer or partial liquidation.

For financial conglomerates, in some cases, the operational, financial and legal inter-dependencies between banking and insurance activities can make separation more challenging. The degree of interdependencies – or separability in our jargon – usually depends on the group’s structure and the extent to which its banking and insurance businesses are integrated.

These interdependencies matter because they can allow distress to spread from one business to another and create reputational risks for the group as a whole. 

The right resolution approach must therefore reflect the activities and interdependencies of each financial conglomerate.

Where banking and insurance activities are highly integrated, a strategy based on the sale of assets may not be appropriate, as separating the activities could disrupt the services and arrangements on which the group relies. In such cases, the sale of the resolution entity’s shares may be preferable, allowing the group including its insurance business, to be transferred as a whole.

The SRB is also actively exploring the combination of resolution tools. 

For a large financial conglomerate, which may be unlikely to attract a buyer under a share-based transfer strategy, this could involve combining a sale of business with a bail-in. For instance, the insurance activities could be sold to reduce the resolution perimeter, which would help generate much-needed liquidity and, in turn, facilitate the execution of the bail-in.

III. Cooperation

This brings me to my third and final principle: cooperation.

So far, I have argued that having two separate resolution frameworks for banks and insurers makes sense. In the vast most majority of cases, distress is likely to originate from one activity rather than both. The BRRD and IRRD equip resolution authorities with the tools and discretion needed to manage such situations.

But imagine this: a group of hackers launches a successful cyberattack against a financial conglomerate already under stress. The attack paralyses the ICT systems shared by its banking and insurance businesses, for instance via a common third-party provider. In severe cases, this could cripple their ability to operate, precipitating the failure of both entities.

Operational risk, in other words, is a common vulnerability cutting across both activities and exposing them to a shared source of disruption.

And while the simultaneous failure of the two activities may be less likely, as the Chair of a crisis organisation, my job is to prepare for the scenarios we cannot afford to get wrong. In such a situation, the effectiveness of our response would depend not only on the tools available under each framework, but also on how well authorities work together.

Such a scenario crystallises the tensions I have described before.

Whereas in a bank- or insurance-only failure, the resolution authority would primarily need to coordinate with the supervisor of the other sector, in this scenario, both resolution authorities would need to cooperate.

I am convinced that we can find solutions and develop coordinated responses to even the most challenging scenarios by working closely with national insurance resolution authorities. 

Both the IRRD and BRRD provide information-sharing and communication channels to ensure that authorities consult each other in peacetime. Where resolution colleges exist, bank and insurance resolution authorities could be invited as observers in each other’s colleges. Where they do not, exchanges could be envisaged. This would help ensure that authorities exercise their mandates in a coordinated and consistent way.

But this will take time. 

Let me be clear: as you understand, I am less convinced by global solutions, like the design and implementation of a group-wide resolution strategy combining the IRRD and BRRD toolboxes, notably because of practical considerations, such as the reconciliation of two valuation approaches, each designed to support its own set of resolution tools.

We should not forget either that the governance for banks is centralised in the Banking Union with one Single Supervisory Mechanism and one Single Resolution Mechanism, while the insurance sector is still based on purely national approaches, and in some cases, on several supervisory authorities per country. 

By the way, the European legislators did not decide to develop FICO Directive in the area of crisis management…

For the moment, the IRRD enters into full application in 85 days. By then, Member States should have designated all their national resolution authorities.

We know first-hand that the planning for resolution is a process – a marathon rather than a sprint. It involves cooperating with many stakeholders, from entities under your remit to authorities from the EU and third countries. These discussions are never easy, and you will not immediately find the right solution or even agreement. 

As said, for insurance authorities, this may prove even more difficult in the absence of a single EU authority to promote a convergence of practices, despite the fundamental role played by EIOPA. 

But we stand ready to share our experience with the national resolution authorities for insurers and look forward to their engagement once they are up and running.

Conclusion

Let me conclude.

Effective crisis management must operate as a seamless continuum, from supervision to resolution, across sectors and borders.

The full application of the IRRD is certainly welcome, as it extends the recovery and resolution continuum to insurers across all Member States. This is good news not only for financial conglomerates, banks and insurers, but for the stability of the EU financial system as a whole.

However, we must ensure that this continuum extends beyond the EU, to the global level.

This is why, as the Chair of the Financial Stability Board’s (FSB) Resolution Steering Group, I have called for greater ‘joint readiness: because in an interconnected financial system, our ability to respond ultimately depends on how well we work together.

FSB member authorities are already working towards this objective. Earlier this year, the FSB launched a review of its crisis preparedness activities, aimed at assessing how to improve cross-sectoral coordination and strengthen international cooperation.

I am confident this work will bring us closer to a truly seamless and comprehensive crisis management continuum.

Thank you.

1.  The FSB published a revised version of the key attributes in 2014, which included a section on the resolution of insurers (in the Appendix II – Annex 2). The most up to date version of the FSB key attributes is available here.

2.  According to the Department of Financial Protection and Innovation of the State of California (see here).

3.  The Joint Committee of the European Supervisory Authorities (EBA, EIOPA, ESMA) annually publishes the list of identified financial conglomerates in the EU/EEA under the Financial Conglomerates Directive (FICOD 2002/87/EC) (see here).

4.  See IMF (2025): France: Financial Sector Assessment Program-Technical Note on Supervision of Financial Conglomerates and Less Significant Financial Institutions (available here)