Thank you for coming to today's press conference.
Europe's banks have come a long way since the global financial and economic crisis.
This was a period when almost €1 trillion was wiped off their balance sheets. It was a wake-up call to a precarious situation.
So we took action to deal with weaknesses in the banking system: making EU banks stronger and more resilient to put us in a better position to withstand any similar crises in the future.
All these years of work and reforms have certainly paid off, as we saw during turbulent times starting with the COVID-19 pandemic.
Throughout a time of great hardship, banks provided vital funding to households and businesses to keep them afloat.
Banks were no longer part of the problem.
This time, they were part of the solution.
With the Banking Union in particular, we have made significant progress on the EU single rulebook. We created European systems for supervision and resolution. Today, the EU has solid rules for handling bank failures and improving depositor protection.
All in all, the Banking Union has been a success.
The EU banking sector is strong and in good shape.
It has built up its resilience substantially.
The EU system works well, with strong rules that allow national authorities to handle bank crises effectively.
But we can make it better.
In fact, Member States asked the Commission to take action in this area nearly a year ago. And this is exactly what we are doing today.
The recent failures of some US and Swiss banks, and resulting stress in the international banking sector, are just a reminder of why we need a strong, functioning system to deal with all banks – whatever the size - when they get into trouble: also when it comes to smaller and medium-sized banks.
This is where we often see national authorities use taxpayers' money to deal with a looming failure, instead of banks' internal resources and industry-funded safety nets.
It means that the resolution system set up as part of the Banking Union is not fully functioning as intended.
So now, we want to broaden the scope of resolution: to make sure that more failing banks can be resolved effectively, rather than being dealt with outside the established EU system.
However, resolution is not the answer to all cases.
There should be flexibility and case-by-case decisions – as well as alternatives, according to circumstances. Authorities should have a broad set of tools available to deal with bank crises, either through resolution or other means.
We need an approach that is proportionate, effective and consistent in handling any failing bank in the EU.
Today's proposals make sure that the failure of any bank - regardless of its size or business model - can be handled in an orderly and coherent way to avoid a ripple effect through the banking system.
At the same time, they aim to preserve financial stability, taxpayers' money and depositor confidence.
My next point concerns funding.
If a bank fails, taxpayers should not end up footing the bill once the bank has exhausted its own capacity to absorb losses.
We should rely more on industry-funded safety nets, like national deposit guarantee schemes. Their primary function is - and will remain - to make sure that deposits are repaid up to the guaranteed level, even if the bank holding them fails.
Our proposal is to allow these schemes to contribute to the funding needed to transfer all deposits – insured as well as uninsured - from a failing bank to healthy bank.
This 'bridge mechanism' can be a more efficient and cheaper way to deal with a bank crisis and protect depositors, instead of paying them after the bank has failed.
But let me stress: the first and main line of defence in such a crisis must be a bank's internal capacity to absorb losses.
For this reason, authorities must make sure that banks have sufficient loss-absorbing capacity.
The 'bridge' would only be used for banks which exit the market and were previously earmarked for resolution.
Mairead will give you details on this.
This will make the resolution process more credible and less disruptive for depositors, shielding them from taking a financial hit when a bank finds itself in trouble.
It will increase their confidence in the EU banking system. It will not only preserve access to their money, but also preserve the critical functions of the bank in question.
Talking about better protection of depositors: the level of coverage of €100,000 per depositor and bank – as set out in the Deposit Guarantee Scheme Directive - remains for all eligible EU depositors.
At the same time, today's proposals further harmonise the standards of depositor protection across the EU. For example, the new framework extends depositor protection to public entities such as municipalities, schools, hospitals and also for certain other cases.
All in all, today's proposals will further strengthen financial stability, protect taxpayers and improve the confidence of depositors across the European Union.
They represent an important step towards finalising the Banking Union.
However, as we know, there is another pillar of the Banking Union which is missing. The Commission's proposal for a European Deposit Insurance Scheme remains pertinent.
We hope that today's proposals will pave the way for more progress on completing the Banking Union going forward.
Thank you and now I pass the floor to Mairead.
