Laboureix: Competitiveness needs resilience, not just simplification
SRB Chair Dominique Laboureix told the ECON Committee that genuine simplification and competitiveness in the Banking Union must not compromise resilience. She emphasized the need for a holistic approach to reforms, particularly concerning MREL and liquidity.
Resilience First, Then Simplification
SRB Chair Laboureix highlighted the ongoing commitment to simplifying resolution procedures, citing the new streamlined process for MREL instrument early redemptions and significantly shortened resolution plans.
However, she cautioned that true simplification must not come at the expense of resilience, advocating for a holistic approach to reforms.
Laboureix argued against reviewing MREL requirements in isolation, stressing their interconnectedness with capital requirements and the broader prudential framework.
Without adequate MREL, resolution would fail, jeopardizing financial stability.
Similarly, while free movement of liquidity across Banking Union subsidiaries could enhance competitiveness, it necessitates closing structural gaps like a common deposit insurance scheme and an adequate liquidity facility beyond the Single Resolution Fund.
Building confidence is paramount for a more competitive Banking Union.
Navigating Complexity, Preserving Credibility
Laboureix stressed the need to avoid adding new layers of complexity to decision-making, emphasizing that coordination between authorities should not compromise the Single Resolution Mechanism's independence.
Clear responsibilities are crucial for crisis management, and resolution authorities require flexibility in deploying their tools.
She then highlighted the critical international dimension, urging the preservation of Europe's crisis management framework credibility.
As Chair of the Financial Stability Board's Resolution Steering Group, Laboureix noted progress on cross-border bail-in application.
She encouraged future reforms to maintain the framework's effectiveness, essential for both European financial stability and international trust.
No Shortcuts to Stability
Laboureix's speech serves as a crucial reminder that quick fixes for competitiveness risk undermining the Banking Union's foundational resilience.
Her emphasis on a holistic approach for MREL and liquidity highlights persistent structural gaps that require political will, not just technical adjustments.
Ultimately, true progress demands integrated solutions that uphold both internal stability and international trust.