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FMA Press Talk: Elke König, Chair of the Single Resolution Board

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Elke König’s (Chairperson of the Single Resolution Board (SRB) speaking notes from the FMA Press Meeting on 29 April 2019  can be found here.

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Ladies and Gentlemen,

Thank you for joining us this evening and special thanks to Klaus [Kumpfmüller] for his warm welcome to Vienna. It is my second time visiting Austria “officially” during my mandate as Chair of the Single Resolution Board, and it is a real pleasure to be here.

In this short introduction, I would like to focus on three key areas:

  • Our progress
  • Our policies
  • And some thoughts on the SRB’s priorities going forward.

Our progress

To start with, let me mention some progress to date. I often say that resolution planning is a marathon, not a sprint. But I can also say that we are well out of the starting blocks and moving forward at a good pace.

  • In 2018, we have developed 109 resolution plans for banking groups. We continue to strengthen these plans and monitor their application. Our aim is to have adopted complete resolution plans for all banks under our remit by next year.
  • We are building up the Single Resolution Fund and it is well on track to reach the target of 1% of covered deposits by 2023.
  • As an organisation, we have also grown – from zero staff in 2015 to close to 400 staff members by the end of this year.
  • Of course, there is always more to do, but we have laid down a solid framework for resolution planning, helped by the close working relationships we have created with the national resolution authorities, including your own FMA.

Our policies

Let me now turn to my second point: our policies. With this solid framework in place, our focus is now firmly on implementation. But that does not just depend on us; it is up to banks to make themselves resolvable, and responsible management teams are already doing this. After all, they know their businesses and can best identify challenges to resolvability themselves. Of course, it is an iterative process for them to get up to speed. But, let me be clear here, we will intervene if we have to in order to ensure resolvability.

The Single Resolution Board’s current role is to communicate clear expectations, to set deadlines and to actively monitor progress towards resolvability. To this end, later this year we will publish an updated resolution planning manual, or more precisely a manual setting out our expectations towards banks. These expectations should not come as a surprise to banks; they know our priorities and expectations well. But the manual will ensure transparency and clarity for all stakeholders.

The recently agreed Banking Package also has an impact on our internal policies. Its rules call for, among other measures, a minimum statutory requirement for subordinated liabilities and a framework for setting internal MREL. We are working in close cooperation with national resolution authorities to ensure these and other new provisions are integrated into both our internal policies and into individual MREL targets for banks.

To continue on the topic of MREL, we have taken a gradual approach, moving from informative to binding targets. The goal is to maintain proportionality in the system while preserving a level playing field and upholding high resolution standards.

The latest SRB policy for the most complex banks, published in January, enhances the quality and quantity of MREL by introducing a series of new features to strengthen banks’ resolvability.

the SRB’s priorities

And finally, let me mention some thoughts on broader, political priorities going forward. There are still a number of areas that need attention in order to have a fully functioning Banking Union.

The Union’s third pillar, the European Deposit Insurance Scheme, is still missing. We hope the political discussions on that will start again once the new European Parliament and Commission are in place.

There are also other issues to address, with one of them being the improvement and harmonisation of insolvency laws in the EU. The safeguard that no creditor shall be worse off in resolution than in insolvency is an important protection provided for in the regulation. But given the difference in insolvency laws, there might be different results in different countries, and this is just one argument.

The backstop to the Single Resolution Fund is agreed in principle, but a framework for liquidity in resolution is still to be developed. This is a key gap in the framework and addressing it would materially enhance financial stability. We hope for some progress in the discussions on this.


So to conclude, there is a lot done, but still a long way to go. The marathon’s finish line is not yet in sight! Once again, thank you for coming this evening and I am looking forward to your questions.