Bank resolvability improves as focus shifts to testing
The Single Resolution Board has published its fourth annual resolvability assessment covering 2025. Euro area banks showed progress across all seven dimensions, but the authority is now shifting focus to operational testing.
Progress across seven core dimensions
The Single Resolution Board's fourth annual assessment evaluates bank progress in building up resolution capabilities through December 2025 in line with official expectations.
The report shows steady improvement across all seven resolvability dimensions between 2023 and 2025.
However, gaps remain in key operational areas where regulatory guidance was recently updated, particularly regarding asset valuation, separability, and portfolio transferability.
SRB Chair Dominique Laboureix stated that while institutions are close to meeting baseline expectations, further technical work is required to ensure full crisis readiness.
To address these vulnerabilities, the authority is introducing a multi-annual testing programme spanning 2026 to 2028 to evaluate practical capabilities.
From rulebooks to stress testing
The publication marks the conclusion of the initial implementation phase for the SRB Expectations for Banks framework, which previously focused on setting up basic capability standards.
With foundational requirements now mostly in place, European resolution planning is transitioning toward a steady-state regime.
Future evaluations will prioritize real-world operational execution, rigorous simulation exercises, and continuous capability enhancement rather than formal compliance.
Paper compliance is no longer enough
Building theoretical resolution plans was a necessary step, but true preparedness requires testing under real crisis conditions.
The SRB's new focus on multi-year testing will reveal whether banks can execute valuation and transferability plans under pressure.
Until these mechanisms are proven in practice, bank resolvability remains largely unverified.