The banking system is much more resilient today, but risks are never excluded - Dominique Laboureix in Ziarul Financiar

The banking system is much more resilient today, but risks are never excluded. Dominique Laboureix, Chair of the Single Resolution Board (SRB): The resolution is part of a safety net that guarantees better financial stability without incurring costs for taxpayers yesterday, 19:42Authors: Cristian Hostiuc , Mircea Nica ^ "Some countries, not Romania, because they were not on the front line of the crisis, but some countries, because of that moment 15 years ago, still pay taxes related to that crisis. Memories of the crisis are fading, but it has been the catalyst for important decisions", Dominique Laboureix said in an interview with ZF. The banking system is much more resilient today than in the past, with solvency, liquidity and profitability all at a very good level, but based on previous crises, in which there were times when the banking sector failed, it was decided to develop new tools to act as a safety net and the resolution can guarantee financial stability, said Dominique Laboureix, Chair of the Single Resolution Board (SRB), in an interview with ZF. “Based on my knowledge and figures, yes, the banking system is much more resilient today than in the past, with solvency, liquidity and profitability, all of which are now at a very good level. Why do we need resolution and why is it important to talk about resolution? As the resolution is part of a safety net that guarantees better financial stability without incurring costs for taxpayers, this is an essential element," he said. Dominique Laboureix also explained that what happened in the past, during the great financial crisis, was a collapse of the banking system and the banking sector failed, which meant that governments were forced to save savings by injecting public money into the banking system or to nationalise banks, because they are essential for financing, lending and saving. "Some countries, not Romania, because they were not on the front line of the crisis, but some countries, because of that moment 15 years ago, still pay taxes related to that crisis. Memories of the crisis are fading, but it has been the catalyst for important decisions. Firstly, the implementation of an entirely new framework for the management of the banking crisis: the resolution framework. Previously, there were two solutions: liquidation - unacceptable because of the role of some banks, too big to fail - and rescue - i.e. public support. Second, the specialised authorities, the socalled resolution authorities. In particular, Europeans decided to develop new tools, in particular the bail-in tool", the Chair of the SRB further elaborated. From the perspective of the new instrument, it allows the absorption of the losses of shareholders, bondholders and other creditors and the recapitalisation of banks, thereby preserving the critical functions of the bank