SRM Vision 2028, our strategy that we are currently implementing, is designed to further strengthen our resolution framework and to make our work more inclusive, transparent, focused and ultimately efficient for the SRB, the national resolution authorities and the banks.

Streamlining practices or reporting requirements should not be confused with deregulation. Resolution needs to remain a credible option for ensuring financial stability. Resolution is credible if banks have the right capabilities in place. An adequate buffer of loss-absorbing liabilities and robust management information systems capable of producing, at short notice, the information and data required for a bail-in or a valuation are, for instance, key ingredients to a successful resolution. Without capabilities such as these ones, resolution loses its teeth, jeopardising financial stability.

A strong crisis management framework is a crucial pillar of a resilient and competitive banking sector. It ensures that, like any other business, a bank can fail without destabilising the wider economy or burdening taxpayers with debt. This requires correctly aligned incentives for shareholders and bondholders, and effective mechanisms for managing the fallout when failures occur. This is the core purpose of resolution: to prevent bail-outs and to safeguard financial stability. This is particularly vital given the limited fiscal capacity of some EU Member States.

The proposed reform of the European crisis management and deposit insurance framework (CMDI) would be a step toward more financial stability. Unfortunately, CMDI has been facing important headwinds while some of its features would enrich the current toolkit, benefitting both depositors, taxpayers and financial stability at large - at a negligible cost for the industry.

Banks benefit too from a good crisis management toolkit and preparedness. Financial stability is the bedrock of a healthy and competitive economy. The recent strong performance of European banks, while partly attributable to a favourable macroeconomic environment, also reflects the resilience built into the system by the Banking Union over the past decade.

This resilience, fostered by resolution planning, protects depositors, taxpayers and – ultimately – the banks’ own long-term interests, especially during times of crisis. A complete crisis management toolkit provides a key competitive advantage for Europe and the Banking Union. Resolution planning allows banks to grow, innovate and even fail without jeopardising past economic gains.

Looking ahead, the SRB’s work will double down on its efforts to further strengthening the Banking Union’s resilience. It is important that policymakers are aware that providing us with the necessary tools to deal with the next crisis will be essential for achieving their own long-term growth objectives.