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Introduction
Good morning, Madam Chair, honourable members, ladies and gentlemen.
Today’s hearing is our last before the end of this term. I would like to start by thanking you all sincerely for the constructive dialogue we have had. Let me reiterate that our accountability towards this Committee, and thus towards the citizens of Europe, is crucial.
I will mention to you today where we are coming from, where we are going and what, from a legislative perspective would help us.
Key achievements
I would like to start with two achievements that are tangible results of nine years of work by the SRM and the banking sector:
First, the Single Resolution Fund has reached a total value of 78 billion euro. It is now fully funded and mutualised. As a result, we will not ask banks for any ex-ante contributions this year.
Second, subject to some last checks, I can confirm that all banks within our remit, except the few cases with an extended transition period, have reached their MREL target on time;
Besides MREL, banks have also built up important capabilities in all resolvability dimensions. This means that they are now much more resolvable - thus safer - than 10 years ago. However, much remains to be done.
SRM Vision 2028
Last year, speaking in front of this Committee, exactly because much remains to be done, I promised you a new strategy for the SRM. Today, I am proud to be able to present it to you.
Vision 2028 was prepared in consultation with our many stakeholders and will be implemented through a multi-annual programme over the next five years. It is based around three areas:
The first is our core business. We need to improve our crisis preparedness by refocusing on the operational aspects. One key element is about testing banks capabilities to handle a crisis, through fire-drills, deep-dives and on-site inspections - for instance. This work has already started and will become more central in the SRM’s day-to-day work.
The second area relates to governance and organisational matters. We want to become more streamlined and more efficient. We also want be more transparent, in particular towards the industry. We have, for instance, started publishing on our website a one-stop-shop list of all the consultations and requests to the industry planned for 2024.
Another example of this new open and transparent approach was the MREL policy consultation done at the beginning of the year. We are currently analysing stakeholders’ answers, which provide very valuable input.
Through the second pillar of our new strategy, I also want to reinforce integration with national resolution authorities and build a common culture within the SRM.
At the same time, we are also increasing our cooperation with SSM. A good example of this good cooperation is the Joint Bank Reporting Committee that was announced this week.
Talking about data, let me also take this opportunity to thank Mr Karas and this Committee for delivering an ambitious position in the “better data sharing” text that was recently approved by the Plenary. We are happy to be a part of it.
The third area of SRM Vision 2028 focuses on human resources. We want to harness the potential of our pool of talent by ensuring better training, more mobility and career development opportunities. We also work on improving gender balance, diversity and inclusion. On this, I would like to thank this Committee for having just approved a very talented woman to join our Board.
CMDI and other files
We are certainly not the only ones working on the Banking Union’s crisis readiness. In this sense, let me thank the CMDI Rapporteurs, and shadows, for their hard work on the review of the Crisis Management Deposit Insurance framework, CMDI.
I want to commend this Committee for having finalised its reports on this file: the vote of yesterday sends an encouraging signal of progress on Banking Union dossiers, and we hope the Council follows suit in the coming months.
CMDI brings many useful, uncontroversial, improvements to the system. On the more contentious points, let me stress once more that asking us to resolve more mid-size and small banks without the proper funding will not work.
Concretely, a modified least cost test would be critical to ensure that, DGS and SRF, can step in after we bail-in the MREL of the bank. Short of this, let’s be honest, some of these smaller banks, if the time comes, will have to be liquidated.
Moreover, I dearly hope that in the next legislative cycle, the process of completion of the Banking Union is taken up again, even in the form of liquidity-only EDIS to start with. We have noted the encouraging signs pointing in this direction coming from this Committee.
Finally, we agree with the Eurogroup on the importance of a stronger European Capital Markets Union. Very simply, deep capital markets are critical to reduce our banks’ dependence on foreign markets to issue MREL securities. In addition, a European securitisation market would certainly help banks having slimmer and safer balance sheets.
Clearly, we stand ready to support with our technical advice on all these files.
Conclusion
Let me conclude. Even if we have already started full steam, a complete implementation of our new strategy will take some time.
This strategy - over time - will increase trust in the crisis management framework, making the Banking Union even safer, more resilient and integrated. Let’s complement this with a legislative framework that is also comprehensive and up-to-date.
Thank you.
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