a profitable decade of the Single Resolution Mechanism and the street forward

Opening handle by Luis de Guindos, Vice-President of the ECB, on the SRM tenth Anniversary Conference

Brussels, 15 October 2025

Introduction

A decade in the past, the SRM was established as a direct response to the worldwide monetary disaster and the European sovereign debt disaster. As the second institutional pillar of the banking union, it has the formidable remit of bettering how financial institution failures are managed whereas safeguarding the general public curiosity and limiting recourse to taxpayer cash. Together with the Single Supervisory Mechanism, it has performed a pivotal position in defending monetary stability within the EU.

Ten years on, we as soon as once more discover ourselves in a difficult setting, marked by important uncertainty and geopolitical threat. The banking union stays incomplete, at a time when the EU must uphold its elementary values and defend its pursuits. We can’t wait till the following disaster to maneuver in direction of strengthening the EU undertaking.

Looking again: a decade of achievements

Looking again on the previous decade, the banking union has been a serious success for Europeans. The banking sector is now way more resilient than it was ten years in the past. The pandemic and Russia’s full-scale invasion of Ukraine affected many components of our each day lives, but the banking sector remained robust. The pandemic introduced the financial system to a digital standstill, whereas Russia’s invasion was adopted by an unprecedented surge in inflation, which referred to as for an equally unprecedented interval of financial coverage tightening. The banking sector proved resilient to these two shocks, managing to revive profitability and adapt swiftly as we emerged from the low-interest charge setting.

Over the previous ten years, the SRM has helped strengthen the banking sector and stop systemic crises. It has led to one thing that was as soon as unthinkable: a European strategy to financial institution decision. Through the SRM, you will have overseen the build-up of liabilities to soak up losses and recapitalise a financial institution in decision. You additionally arrange the €80 billion Single Resolution Fund for the orderly decision of banks in more difficult eventualities.

The SRM has proven that decisive European motion can make sure the continuity of banks’ important capabilities with out inflicting extreme financial disruption. A working example is Banco Popular in 2017, one of many first situations of a bail-in and – regardless of the anticipated judicial disputes – one which was carried out on strong authorized grounds. The SRM’s clean dealing with of decision circumstances (which I witnessed first-hand as financial system minister in Spain throughout the Banco Popular decision) sends a robust sign: Europe has the instruments and dedication to handle banking crises efficiently.

Since 2015 now we have invested important effort in making certain that the ECB and the Single Resolution Board (SRB) work collectively seamlessly in any respect ranges, together with by knowledge sharing and the varied dry-run workouts which can be important to advancing decision preparedness.

The street forward: a necessity for additional monetary integration

However, we can’t relaxation on our laurels. The banking union continues to be incomplete, and far work lies forward to make sure that banks can function in a real Single Market and reap economies of scale.

For this, we should recapture the mindset that enabled us to create the banking union. This means recognising the magnitude of the challenges forward and understanding that solely by performing collectively as Europeans – rising above nationwide pursuits – can we handle them.

Let me begin with the actions we want from legislators to make sure significant progress in direction of finishing the banking union.

First, whereas the Single Resolution Fund is prepared, its backstop – to be offered by the European Stability Mechanism (ESM) – continues to be lacking. If we’re to be ready for financial institution crises, this hole have to be closed by finalising the ratification of the reformed ESM Treaty.

Second, we want a European framework for liquidity in decision. After decision, the supply of liquidity help is commonly indispensable for restoring market confidence in a financial institution.

Third, a European deposit insurance coverage scheme (EDIS) stays essential for making certain a cheap and harmonised deposit safety system. EDIS would additionally assist handle the bank-sovereign nexus. We sit up for seeing renewed efforts by co-legislators to maneuver ahead on EDIS. This is urgently wanted – let’s get it completed.

These points have been on the desk for a very long time now. I’m optimistic that we are going to see progress. First, as a result of they’re important for the EU undertaking and, second, as a result of their final purpose is to guard the banking system, financial savings and entry to finance within the EU. The current settlement on the reform of the disaster administration and deposit insurance coverage framework is a vital step ahead, but it surely doesn’t substitute EDIS. I do, nevertheless, recognise the politically contentious nature of the subject and co-legislators’ work in hammering out the mandatory compromises to enhance EU guidelines for financial institution disaster administration.

More stays to be completed. Mario Draghi’s report setting out suggestions on how you can increase European competitiveness was revealed over a 12 months in the past now. But the proposals put ahead by Enrico Letta in his report on the way forward for the Single Market aren’t any much less essential. The Single Market, one of many EU’s biggest achievements, is a cornerstone of prosperity and resilience but it surely too stays incomplete in some respects. By eradicating the limitations to cross-border financial exercise and fostering even deeper financial ties, we are able to lay the groundwork for monetary market growth and better funding throughout nationwide borders.

For the banking sector, finishing the banking union – of which the decision framework is an integral half – would decrease limitations to cross-border enterprise and promote the move of financing to high-productivity corporations within the EU. Improving the free move of capital and liquidity and facilitating cross-border mergers inside the banking union ought to be an pressing precedence. The nationwide ring-fencing we see at current severely limits what European banks can obtain.

More basically, eradicating obstacles in tax, insolvency and company legislation are important to fostering cross-border financial exercise. At the identical time, the prices related to an absence of harmonisation in securities buying and selling and post-trade companies in Europe can also be stifling the expansion of our capital markets. The common prices for settlement and safekeeping borne by market individuals are larger in Europe than within the United States. Our regulatory, supervisory and market practices create limitations that make it troublesome for markets to scale up. They additionally expose securities issuers, intermediaries and buyers to uncertainties and excessive compliance prices. Harmonising elements of the debt issuance course of would handle such frictions. This would make the EU capital market extra engaging for buyers and strengthen the worldwide position of the euro.

But decisive motion to advance the European undertaking requires a European institutional framework that preserves stability and fosters better integration.

More built-in supervision of EU capital markets will likely be key on this endeavour. European-level supervision offers the instruments and the broader perspective essential to safeguard monetary stability, as a result of systemic dangers don’t cease at nationwide borders. EU-level authorities must also be higher outfitted to foster integration throughout borders. This doesn’t must occur : steadily introducing new powers for the European Securities and Markets Authority, bearing in mind the precise traits of every sector, will likely be essential in build up its capability whereas sustaining the central position and experience of nationwide authorities.

Finally, we must also critically assess how we are able to additional enhance and simplify our regulatory and supervisory framework. Many EU authorities, the ECB and the SRB included, are at the moment working intensively on simplification. We are strongly in favour of decreasing undue complexity, administrative burden and overlaps, so long as resilience and compliance with worldwide requirements are preserved. As prudential and determination necessities work together with one different, collaboration between authorities is essential. Reporting overlaps could, to some extent, be unavoidable, however we are able to scale back the burden by establishing an built-in reporting system that will likely be accessible to the related EU authorities.

Conclusion

Let me conclude. The SRM’s mission ten years in the past was clear: make sure that failing banks are resolved in an orderly method, with out resorting to taxpayer cash and with out rising dangers to monetary stability. Born out of a disaster, the SRM has delivered. Over the previous decade, it has helped to protect Europe from monetary turmoil and, within the course of, the SRB has grow to be a trusted worldwide accomplice in disaster response.

The subsequent ten years will undoubtedly convey new challenges. At the ECB we sit up for persevering with our work with you to make the SRM’s subsequent decade as profitable as its first.

Let’s not be complacent, let’s try for robust European options: finishing the banking union and constructing a powerful financial savings and investments union will contribute to an much more resilient banking sector that helps productiveness and progress. This will profit all Europeans.