Speech by SRB Chair Dominique Laboureix to the ECON Committee - "Simplification, Competitiveness and Crisis Preparedness"

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Good afternoon, Madam Chair, Honourable Members, ladies and gentlemen. 

It is a pleasure to be here with you today.

Let me start with a brief update on the SRB's work before moving on to simplification, competitiveness and the international dimension of resolution.

1. Annual report

A few days ago, we published our 2025 Annual Report. I will not dwell on it today, as I have kept this Committee regularly informed throughout the year. Let me simply highlight four points. First, we continued strengthening banks' resolvability through testing, crisis exercises and on-site inspections. Second, following the entry into force of the Crisis Management and Deposit Insurance review, we started working on its implementation. Third, we have been deepening our cooperation with our partners across the Banking Union, especially the National Resolution Authorities and the Single Supervisory Mechanism. Finally, we further enhanced our operational readiness. 

2. Simplification

On simplification, I told this Committee in the past that, wherever possible and within our mandate, we would simplify our procedures and eliminate unnecessary burden. We are progressing on that commitment. A recent example is our new streamlined procedure for approving early redemptions of MREL instruments making the process faster and more predictable. We have also substantially shortened and simplified our plans, freeing up SRM resources to focus on what really matters while reducing burdens on banks.

3. Competitiveness 

But simplification is only one element of the broader discussion on competitiveness, which is rightly high on the European agenda. 

As the Commission's report on competitiveness nears its publication, I would like to leave you with three considerations.

First, genuine simplification that does not come at the expense of resilience requires a holistic approach. Everything is interconnected.

Let me give you two examples.

Some people argue that MREL requirements are too high.  But MREL exists for a reason. It ensures that resolution can be financed using investors’ money and, if that is not enough, tapping the Single Resolution Fund. It thus ensures that the bank can emerge from resolution meeting its capital requirements from day one. Reviewing MREL in isolation from capital requirements, supervisory expectations and the broader prudential framework simply does not work. Without enough MREL, resolution would fail and financial stability would not be restored. If we want meaningful improvements, we need to look at all these elements together as much as possible.

The same applies to liquidity. It's clear that banks would be more competitive if liquidity could move freely across banks' subsidiaries within the Banking Union. But again, it is not that simple. The individual requirements currently in place also reflect the fact that the Banking Union still lacks a common deposit insurance scheme and an adequate liquidity facility beyond the Single Resolution Fund. If we want to remove those requirements, we also need to close these structural gaps. 

Second, it is important that on the road to competitiveness we do not add new layers of complexity in decision-making. Coordination between authorities can certainly improve, but independence of the SRM should not be compromised. Clear responsibilities remain essential, especially for crisis management.

Third, even if predictability is a quality we should aim for, resolution is a complex business. This is why resolution authorities need to retain sufficient flexibility in deploying their tools. 

4. The international dimension of resolution

This brings me to my last point. 

As Europe pursues greater competitiveness, we should not lose sight of another essential objective: preserving the international credibility of our crisis management framework. 

Financial stability is international by definition. As Chair of the Financial Stability Board's Resolution Steering Group, I experience first-hand how closely resolution authorities around the world can work together. 

This international dimension has very practical implications. For example, when resolving a cross-border bank we must also navigate the legal frameworks of third countries. In particular, through our work at the FSB, we are making progress on the effective application of cross-border bail-in.

This is why I would encourage you to keep one final principle in mind as you consider future reforms. Simplification and competitiveness are important objectives, but in the international dimension it is key to maintain the effectiveness of our resolution framework. This is essential not only for financial stability within Europe, but also for maintaining our credibility with our international counterparts.

5. Conclusions

Let me conclude by thanking this Committee, and in particular the rapporteur on the 2025 Banking Union Annual Report, Honorable Regner. We share the objective of making the Banking Union stronger and more effective, and we look forward to working with the Commission and the co-legislators in the months ahead. As practitioners, we stand ready to contribute to all the important legislative files that will come before you.

Thank you.