On 10 October 2019, the Single Resolution Board (SRB) held its fourth annual conference. In contrast to previous years’ events, which focused on policy development and definition of resolvability mechanisms, this year’s discussions tackled topics related to the actual implementation of such policy. Aptly titled “Bank Resolution: Turning Policy into Action”, the conference explored rising challenges to practical resolvability.
Pertinent issues identified included completing the Banking Union (BU); the lack of a functioning Capital Markets Union (CMU); the need for a more robust framework around liquidity in resolution; and newfound information technology (IT) issues that impede the efficiency of resolution and operational continuity. In comparing the EU to other jurisdictions, the lack of a European market was flagged repeatedly as cause for concern: With investors still viewing banks on national terms — i.e. “German” versus “Italian” instead of “European” — the EU is not an appealing market to investors.
Conference participants overall agreed that the task of “turning policy into action” is one that can only be achieved through a strong team effort. While it is for firms to make themselves resolvable, resolution authorities need to be clear on what this means. An overall need for greater clarity and, with it, increased transparency was identified.