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Ladies and gentlemen, first, let me thank Fernando for this introduction and all the colleagues at the BIS, FSB, FSI and IADI for organising this event and inviting me to speak here today in front of such an esteemed audience.
Amelia Earhart, trailblazing aviator, first woman to fly solo across the Atlantic, has been quoted as saying:
“Preparation, I have often said, is rightly two-thirds of any venture.” But at some point, you have to take the leap and trust yourself to fly.
Today, as often, I would like to discuss the work we do to be prepared — Amelia’s 'two-thirds' — which, in our line of business, is clearly a much higher percentage. I'll also address how to eliminate the lingering doubts around our resolution framework and the need to tackle the inevitable unknowns that arise in a bank crisis.
1. Lingering doubts despite a strong framework and important progress
The 2023 turmoil has been both a demonstration that the resolution framework works – as the FSB concluded in its lessons learned report – and an important wake-up call to close its remaining gaps both at global and national level.
Back then, even if financial stability was quickly restored, some actions and some public statements, cast a shadow of doubt over the resolution framework.
In Europe, we were largely spared by the recent turmoil – a bit of good preparation but certainly also a little bit of luck. However, we were not spared by the doubts over the resolution framework. Recently, concerns have been raised in the press about bank mergers and acquisitions within the Banking Union, arguing that in a crisis, taxpayers from one Member State could end up bailing out depositors from another.
I am perhaps not the best placed to determine whether a merger or an acquisition makes sense or not from a going concern perspective. But, as a resolution practitioner, I am very well placed to say that this debate on who bails out whom is from a different era. It may have made sense in 2008 but it is very surprising in 2024. ...
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