[Check against delivery]
[Introduction]
It is good to see you once again – both here and online - and I know I have said this in the past, but the relationship we have with you in the media is something I very much value, in order to help us to explain the work we are doing to a wider audience. It is a very busy news agenda, and I do appreciate your time here this morning.
With that, I want to give you a short overview of our work, before then hearing from you, and taking your questions.
[New Board Members / Vice-Chair]
From this morning, I am pleased to say that the SRB has, for the very first time in its ten-year history, a gender balanced board. Our new board members, Slavka, Radek and our new Vice-Chair Miguel are taking up their duties as of about an hour ago! Better balance and better diversity in our staffing is something I raised in my hearing at ECON and is a central part of the SRM Vision 2028 strategy, and I am happy to see that this become a reality over time.
Other progress at the SRB:
At the SRB, we have made good progress in other areas too:
First of all, at the end of third quarter of last year, no bank was falling short of their MREL requirement. Only four banks, with special situations, still have time to reach full MREL capacity. Industry has worked hard to meet these requirements and it is something we report on regularly. Of course, it is not all about MREL - MREL is not the only resolvability dimension. Banks, large and small, have been steadily working towards meeting all our resolvability conditions. For example, they have improved in their ability to provide data in the case of a resolution and to implement a bail-in.
Secondly, the SRF remains full. So - unless circumstances change - banks will not need to pay into the Single Resolution Fund in 2025, just as last year. Today, we have a safety net of 80 billion euro as one of our tools in the financial stability toolbox – and perhaps a reminder that the amount contained within the SRF must be at least 1% of total covered deposits.
Third, we are implementing our first on-site inspections, which is a key part of SRM Vision 2028 - When I took my position, I promised to develop and implement this new tool, and it is now in place. These inspections will be built up over time and we have carried out two so far this year, with more to come.
A fourth area I might mention is our drive to increase transparency and efficiency in how we work. A good example is the ongoing consultation with the banking industry and relevant stakeholders on our Operational Guidance on Resolvability Testing for Banks. Now that the phase-in period of the Expectations for Banks has come to an end, the SRM Vision 2028 outlines the strategy for the next phase of the Single Resolution Mechanism. It focuses on crisis management and readiness, making all resolution tools operational, and comprehensive testing to ensure the effective resolvability of banks.
This consultation will help us develop operational guidance for bank-led tests and will develop a comprehensive multi-annual testing programmes from 2026 to 2028.
In line with the SRM Vision 2028, our systematic, multi-annual testing programs will ensure that banks are not only compliant but truly operationally ready for resolution.
[Wider issues]
Now I would like to look at some of the wider issues affecting the SRB’s work:
The Savings and Investment Union aims to connect European savings to the most productive European investment. This is absolutely necessary if we want to develop an industry fit for the challenges of our times.
However, such a Union will only work if investors have continued trust in the markets and in the institutions that underpin them. This is exactly what the resolution framework does. When a bank crisis happens, and it will happen, we are there to ensure that this trust is preserved.
This is why the completion of the Banking Union is such an important piece of the Savings and Investment Union.
Perhaps a word on simplification - we see more and more references to simplification these days, and at the SRB, we are working to simplify the resolution planning process.
We want more “bang”, in term of financial stability, for each “buck” spent on resolution planning. For the banks and for us. This, at the end of the day, is what simplification is all about.
However, simplification in our practices or reporting requirements should not mean de-regulation. This is particularly true for the crisis management side.
Resolution needs to remain a credible option to ensure financial stability. This can only happen if banks have the right capabilities in place, with an adequate buffer of loss-absorbing liabilities and robust management information systems that allow them to produce at short notice the information and data required for a bail-in or a valuation, key ingredients to a successful resolution.
The CMDI is a long-running issue, but it is nevertheless an important one. There is a real practical added value of this reform. This is about expanding the scope of resolution to those smaller banks whose failure would endanger financial stability at regional level. Flexibility is what authorities need to achieve successful resolution decisions. A resolution decision is successful when, indeed, restores financial stability.
I could also mention the Banking Union’s third pillar – the European Deposit Insurance Scheme. It is still missing. A common depositor protection is key to achieve an integrated and competitive Banking Union – as Mario Draghi noted in his report on European competitiveness.
The international context is of course something we are monitoring closely, but whatever the context, the work of the SRB is to try to ensure financial stability by making sure our banks are resolvable.
On new emerging risks, I would say that the resolution regime, which was built a few years ago at this stage, must constantly keep up with new arising challenges. As financial innovation can accelerate deposit outflows, a reliable provision of a sufficient liquidity in resolution would be very helpful. In this regard, it might be good to also investigate the possible need to include more NBFIs in the resolution framework.
[Conclusion]
With that, let me come to a close - I want to have plenty of time for your questions. Once again, thank you for being here today and all your work to report on and explain financial stability and resolution.
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