On 12 April 2019, the European Central Bank (ECB) published a speech by Andrea Enria (Chair of the ECB Supervisory Board) on the issue of cross-border banks.
Mr Enria begins his speech by discussing the lessons that were learnt on crisis management during the 2008 global financial crisis. He also discusses what the ECB has done in recent years to deal with the so called ‘global in life, global in death’ issue noting in particular that a comprehensive toolkit has now been developed at the global level.
Mr Enria’s final comments cover European banking union and what else can be done. In respect of the latter issue he notes that two developments have been a step in the right direction: (i) agreeing in principle on a common backstop to the Single Resolution Fund; and (ii) a European deposit insurance scheme.
He also mentions that recovery and resolution plans can become key tools for authorities to lay out how they will approach cross-border banks that get into trouble. “So the next step is to ensure that the links between recovery and resolution plans are fleshed out; the steps that take us from recovery to resolution must be clear to both home and host authorities and to the banks themselves. This will maximise the chances of a smooth resolution process”, states Mr Enria.