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SRB Chair, Elke König speech at the SRB Annual Press Breakfast



Good morning to each of you and thank you joining us today – be it in person or online. We are all happy to have this opportunity to talk with you.

Our last press breakfast was in the midst of Covid and little did we think that 12 months on, we would be meeting in the midst of a war in Europe. We are all aware of the human tragedy occurring and hope for a peaceful solution to be found soon. 

For the purposes of our work, today I will stick to the core topics of resolution and financial stability in Europe.

We rely very much on you to tell our story, the story of the work of the SRB – an independent, self-financed agency of the EU. Our mission is to protect taxpayers’ money from any future bailouts and promote and maintain financial stability. We do this by working with each bank to make it resolvable. As our experience has shown, we see that the better a bank is prepared for resolution, the more MREL it has built up and so on, the less likely it is they will go into resolution.


However, resolution decisions are required from time to time. And we saw that recently in the case of Sberbank. It is a good example of putting policy into practice at very short notice. The crisis in this case unfolded with great speed because of the current political situation and resulting loss of trust in this specific bank.

With regard to Sberbank we had decisions to make in three countries – Croatia, Slovenia and Austria to be able to find the best possible solution. First, a 48-hour moratorium was deemed necessary for the group. In Croatia and Slovenia, we decided that resolution was in the public interest and, within the moratorium period, buyers for the two subsidiaries in these countries could be found in an open sales process. In these two countries, operations continued on as normal, with no impact on customers or on financial stability.

Turning to Austria, we decided that no resolution action was required for the Austrian parent company, because it was not in the public interest, and therefore it is now dealt with at national level in Austria. In other words, the bank is ceased operations and depositors are protected under the national deposit guarantee scheme

We were able to manage the crisis, thanks to the structures in place. The SRB is an independent agency of the European Union, but we worked hand in glove with many partners at national, EU and international level and I am thankful for the excellent cooperation we received at all these levels. This was of particular importance here as Sberbank Austria

  • had subsidiaries in the Banking Union;
  • it had subsidiaries outside the Banking Union but in the EU;
  • and finally, it also had subsidiaries outside the EU

All actions were well coordinated by the SRB, thanks, as I said to the good cooperation from our partners in many countries.

We can call these three decisions a success for banking resolution and financial stability in Europe.

[Sberbank: a success, but room for improvement]

The three decisions taken have one thing in common – protection. The decisions protect financial stability; and the decisions protect depositors up to an amount of at least 100,000 euro in Austria and with no limits in both Slovenia and Croatia. We acted to protect the public interest and ensure financial stability. All of this has been done without having to use public funds, so not only are Sberbank’s customers protected, the taxpayer is too.

The case of Sberbank is further proof that the EU resolution framework works, but let us bear in mind that Sberbank was not a large EU bank by any stretch of the imagination.

In this case, we were – again – faced with a couple of problematic points. In this group, we were dealing with different legal frameworks simultaneously, creating quite some challenges. It is important to highlight that this would be amplified for a larger banking group operating in say half a dozen or more Banking Union countries. This is why I have long been calling for a harmonisation of the framework for insolvency of financial institutions. This is really important if we are serious about being able to resolve large banks over just a few days. This case should serve as reminder of the need to get on with the job of harmonisation, not least to allow handling the failure of a bank in a consistent manner within the Banking Union or better still, being consistent right across the EU.

The second point I would highlight is the need for EDIS. Customers of these banks needed to be assured that their savings or deposits, are protected up to 100,000 euro, so long as the national or regional-backed DGS can pay out. It would be much better to have a European scheme to provide reassurance to depositors. It is important we can communicate with confidence in a time of crisis. At present, the set-up is not yet optimal. We have to ask the question, what happens if the DGS is not sufficiently funded to pay out? Would the taxpayer be on the hook for the balance?

By the way, we saw quite some tension building up in at least one member state as citizens were questioning the safety of their deposits also in other banks. We have to be able to hold confidence at a time of crisis, and a proper EDIS would help to do this.

Therefore, I hold much hope for the CMDI and I hope progress can be made on some aspects as soon as possible. I know that the Eurogroup president Paschal Donohoe his utmost to progress this topic. 

[Policy and priorities: Resolvability assessment]

Turning to some policy areas now, and first I would look at the resolvability assessment. Put simply, it can be difficult for people like you, or even people working full-time on resolution, to work out which banks and which countries are making best progress. It can sometimes seem like a job of comparing apples with oranges.

A more transparent assessment of resolvability has long been a key priority for the SRB. That’s why we have defined a heat-map on assessing resolvability, designed as a tool to monitor, benchmark and communicate on banks’ progress towards full resolvability. The heat-map illustrates the results of the combined assessment of the level of impact of each resolvability profile on the overall resolvability and the progress made by banks according to the Expectations for Banks document published by the SRB in April 2020.

We are currently evaluating the first horizontal assessment. Achieving an overall consistent and also realistic assessment and heat-map is not an easy task, but it is a very valuable exercise – and we are clear to banks lagging behind: they must get their house in order. The SRB is planning to publish an aggregated heat-map in summer, once the results are of sufficient quality, and then start a yearly reporting cycle

In a nutshell, preliminary results of the assessment performed last year show that banks have made most progress on the capabilities that were phased-in in previous years, in line with the timeline indicated in the Expectations for Banks.

We also see that G-SIIs are more advanced on resolvability profiles such as Governance, Loss Absorption Capacity, FMI contingency planning and communication planning, consistently with the international standards on these resolvability conditions.

The other banks are less advanced on governance and loss-absorbing capacity, while they appear broadly aligned in the other profiles.

Significant progress has instead to be made on the capabilities which are expected to be phased-in during the current or next resolution planning cycle (e.g. liquidity in resolution, adequacy of management information system for resolution, separability of assets and liabilities under a transfer tool and restructuring after bail-in tool).  Just a brief comment on MREL – we continue to publish to quarterly dashboard on this, and the next one is due soon. All but a few banks are meeting the intermediate targets of January 2022, although there is still a gap for the final target. It is important to remember that MREL instruments expire, so banks need to plan properly.

We remain committed bringing all banks to the same resolvability-footing by the end of next year and publishing an aggregated heat-map. Please be sure to continue following us on social media for further updates on this.

[Policy and priorities: other areas work]

This year will focus on fine-tuning the policies we already have, rather than implementing major changes, as we lead into 2023 – the target year for reaching steady-state resolvability. It is most likely that we will also open these policies once more for consultation with the industry to further enhance transparency and tailor our implementation guidance to industry needs.

In terms of priorities for resolution planning, topics for this year include:

  1. the continued built up of adequate MREL capacity, an ongoing topic; and indeed I would direct you to our website for our quarterly updates.
  2. banks’ capabilities in managing liquidity and funding in resolution,
  3. the topic of separability and business reorganisation plans and
  4. a prioritisation of the work on management information systems – this sounds simple, but if information is key to decision making, we have to be sure that banks can provide that information to us, and quickly.

In 2022, we will also continue to build up the Single Resolution Fund, as we will do every year up until 2023, when it will be fully funded. We are on target at present. Just to remind you, the SRF is a fund that can be called upon in the case of resolution. I am pleased that the backstop to the Single Resolution Fund has been agreed at the end 2020, and will hopefully be soon in place. All the preparatory work is done – we are just waiting for the ratification of the ESM treaty changes at this stage.   


This morning, I do not want to take up all of the time we have together, since I know you want to put your questions to me and my fellow board members. And of course, if you have any questions you think of later, or want clarification on, you have the Comms team’s details, so please do get in touch.

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