ECB and EU Single Resolution Board chairs call for banking integration alongside regulatory simplification

In a joint article on the European Commission’s banking competitiveness agenda, European Central Bank Supervisory Board Chair Claudia Buch and Single Resolution Board (SRB) Chair Dominique Laboureix called for regulatory simplification and deeper banking integration to advance together. Their argument echoes the SRB’s earlier support for coupling simpler rules with completion of the banking union, rather than relying on simplification alone to improve competitiveness. They stressed that reducing complexity must preserve resilience, consistency with internationally agreed standards and clear responsibilities for supervisory, macroprudential and resolution authorities. The chairs identified three priorities for overcoming national fragmentation. A common European deposit insurance framework would reduce the dependence of confidence in deposit protection on national banking systems and sovereign finances, helping ease incentives to restrict capital and liquidity movements across borders. Freer transfers within banking groups would require stronger supervisory, prudential and resolution safeguards, including credible intragroup support arrangements that provide greater certainty that resources will remain available where needed during stress. Currently, capital and liquidity waivers are available within individual countries, but only liquidity waivers are possible across borders, and these are rarely used. The chairs also advocated credible liquidity arrangements during and immediately after resolution. Even a bank recapitalised through resolution may face substantial outflows or funding difficulties, with the needs of the largest cross-border groups potentially exceeding existing European resolution resources. A credible liquidity backstop would help viable banks continue operating and performing critical functions.