Abstract
The creation of the Single Resolution Mechanism has been a crucial step forward in the development of the banking union. Yet the coexistence of a common regime for the resolution of systemic banks with a wide variety of - typically inefficient - national insolvency regimes for non-systemic institutions creates significant obstacles for the adequate management of banking crises in the euro zone. In particular, the current regime fails to provide robust procedures for managing the failure of mid-sized institutions and falls short of fully breaking the link between banks and sovereigns. The speech discusses the pros and cons of the various options for addressing the current deficiencies and sketches the steps of the gradual establishment of a common FDIC-like insolvency regime for the banking union.
