26 April 2023

SRB's Laboureix: speech at the Press Breakfast

Good morning to each of you and thank you joining us today – be it in person or online. I am happy to have this opportunity to talk with you, and I am looking forward to your questions later on.

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 banks are prepared for resolution, the less likely it is they will go into resolution.

Before I dive into some of our current priorities here at the SRB, I am joined this morning by Tuija Taos, who is our newest board member here at the SRB. She is Director of Resolution Planning & Decisions here at Directorate C. Tuija. I am also pleased to be joined by Sebastiano Laviola, whom a number of you will know already, since he has been at the SRB since he joined in 2019. He is Director of Resolution Policy & Cooperation and so has a central role in developing policy for the SRB and our European and international cooperation.

This morning I want to:

• First take a look at recent events in the banking sector;
• Before then taking a look at current priorities for the SRB;
• And finally looking to the future.

[1. Recent events]

First, to more recent events.

The economic and geopolitical situation is something the SRB is monitoring closely.

We have watched carefully the unfolding events in the US with regard to SVB and then the events involving Credit Suisse. On Credit Suisse, a GSIB, some brief comments: the Swiss authorities clearly took swift action to protect financial stability and financial stability is a common objective. We should also note that this was not a resolution case, but a sort of financial restructuring of Credit Suisse, ending up into a sale to a private bank, with the agreement and support of the Swiss authorities. I will not go into the specifics of the case but I will comment from the perspective of the European resolution authority

• Our resolution framework has a very clear order of bearing losses: shareholders – in our jargon their shares are called CET1 instruments – are the first ones to absorb losses, and only after that would AT1 contribute, and eventually bondholders.
• This has already been applied by the SRB with the resolution of Banco Popular back in 2017, with first the write down of equity and then the conversion and write-down of AT1.

Finally on Credit Suisse, I would highlight the joint statement we issued over that weekend together with our colleagues in the ECB’s SSM arm and the EBA.

Perhaps a word on non-banking financial institutions or NBFI – as the interconnection with the banking sector is sometimes strong. We, at the SRB, are supportive of the Financial stability board on NBFI, for more transparency and efforts on liquidity issues...

 more at SRB

© Single Resolution Board