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The seminar brings together the key partners in operating the EU bank resolution framework to discuss the Commission’s most recent proposal for reform. This is, of course, the crisis management and deposit insurance – or CMDI - proposal.
I should acknowledge upfront that the SSM and SRB have co-operated closely in preparing this proposal. And we in the Commission are grateful for that co-operation.
Beyond that, we have consulted stakeholders extensively when drafting the proposal. Hopefully, we have addressed most of the concerns expressed in those consultations – although I am certain not all!
Most of all today is an opportunity to discuss what you in the seminar think works well and maybe not quite so well in the proposal. In fact, I feel a bit like a student waiting for his homework to be marked!
I want to say a few words of background to the proposal. The EU banking sector has come a long way since the global financial crisis in 2008/9. Our banks are much stronger and more resilient – as evident in the recent EBA/SSM stress tests.
This is to a very large extent due to extensive reform of the EU regulatory framework for prudential oversight and crisis management. It is also due to profound changes in the institutional architecture of the banking union – reflected not least in the fact that this seminar today is being co-organised by two institutions created for the banking union, the SRB and the SSM.
All these improvements allow us to prevent and manage bank crises much more effectively than 15 years ago. We have a lot to be satisfied about.
But if so, why did we put the CMDI proposal forward?
We certainly didn’t do it for the enjoyment – as my team and others in this room who have worked on any banking union file will be happy to tell you. Progress in completing banking union is hard-earned!
We proposed the CMDI reform, because our resolution framework works well in theory but does not fully function as intended. Actual experience since 2015 has revealed, a pervasive reluctance to use the resolution framework as it now stands. We have only used it once in all that time.
We needed to understand why this is the case and adjust the framework accordingly – all the time without throwing the baby out with the bathwater.
In that sense, I want to be clear today that we see the CMDI proposal as an evolution – not a revolution – in the existing framework. Some significant adjustments are proposed. But none of the fundamentals are compromised.
Most importantly, the two fundamental objectives of what we might now call the post- great financial crisis bank resolution doctrine – safeguarding financial stability and protecting taxpayers – are fully preserved. In fact, we believe this proposal reinforces them....
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