Thank you Melinda.
It is my pleasure to give the closing remarks to the SRB Annual Conference. I want to be brief – there has been much discussion this afternoon, but I want to share with you two key ideas – or, as they might say in the ted talk jargon – two takeaways – for you to ponder as you leave here today.
The first such thought is on the state of the crisis framework. Is it really good enough?
The speakers on our first panel showed just how far we have come in Europe in terms of building crisis management in the Banking Union. Not only we were unprepared for the financial crash of 2008, we have to be honest and say that we didn’t really know what was going on inside major European banks. There was no proper oversight, no European supervisor and no banking resolution system.
So today, if it is true to say that some elements of the Banking Union regulatory framework are missing, at least we have a framework with which we can monitor progress and identify gaps. We can measure our progress, we can be at least aware of the shortcomings.
We cannot control what size or shape a future crisis might take – that is a known unknown if you like – and it is something we cannot control.
However, there are things we can control. There are things we didn’t know in 2008 that regulators ought to have known.
Today we know a lot more about the shape of our banks, compared to all that was unknown about them in 2008. That is surely something that will play a positive role in overcoming any upcoming challenges.
Now, to my second takeaway – can we really say that European banks are resolvable and resilient today? Well, there were many thoughts and views on this point. I think we can say that most banks, by now, are resolvable.
However, even though we have detailed plans for each bank, there is always room for improvement. The larger the institution, the more complex the arrangements. Focusing on the how implementable each resolution plan actually is, is going to take centre stage from here on in.
No longer will it be enough to have resolution plans in place for each SRB bank. Our focus now will shift to making sure that the plans on paper, that the preferred resolution strategy, can work in practice.
The preferred resolution strategy actually has to be implementable, and at short notice.
Testing and fine-tuning existing plans, to ensure our banks are resolvable with the least possible damage, is for me, a key challenge in our work in the months and years ahead.
In fact, in order to fine-tune our plans, the SRB might adopt the approach of many health authorities when battling Covid-19 – test, track, trace. Our testing will continue with individual resolution plans, while the tracking and tracing will be collated in the resolvability assessments and heat-maps to be published annually.
The testing of plans is vital, because resolution plans are central to how the SRB can help protect the taxpayer and ensure financial stability.
Finally, a few words of thanks. Thank you to all those who put today’s event together. Thank you to our speakers and thank you the audience, for your questions and for your attentiveness, whether online or here in Brussels – it is much appreciated.
I would like to thank also our Chair, Elke König – both she and I will seek pastures new in the months ahead – and I want to wish her all the very best in the next chapter of her life, and on behalf of all the staff at the SRB – past and present – may I thank you for the work you have done in overseeing the setting up of the SRB. It has not always been easy, and we may not always have seen eye to eye on absolutely everything, but I know that you did an excellent job, and there can be no doubt about your important role in the development of banking resolution in Europe.
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