First, the experience of the Single Supervisory Mechanism shows the advantages of all the players being subject to one leading authority in an integrated banking space, with clearly defined responsibilities and coordination. This single supervision allows for comparisons across a vast sample of comparable institutions, and thematic campaigns of on-site missions. Second, our active supervision features regular and comprehensive stress testing including on interest rate risks, which is also applied to less significant institutions. The  2/3  BIS - Central bankers' speeches  European Banking Authority (EBA) conducts an EU-wide banking stress test every two years, taking into account the latest macro-financial developments: in 2023, stress test scenarios are typically based on a sharp rise in short-term and long-term interest rates. Moreover, following the EBA guidelines on Interest Rate Risk of the Banking Book (IRRBB) – as part of the rigorous application of the Pillar 2 process – , published in 2018 and enhanced in 2022, European banks are required to perform regular supervisory tests to measure the impact of interest rate movements on their interest margins and economic value of equity; US regional banks such as SVB are not. III. Resolution: how to make it work Now for our last blessing. Since the global financial crisis, banks and authorities have strengthened their ability to deal with crisis events by developing a resolution framework. However, in the case of Credit Suisse, the Swiss authorities chose the option of a merger.

Recent Trends in Intergenerational Mobility”, American Economic Review: Papers and Proceedings, 104(5): 141–147. Chetty, Raj and Nathaniel Hendren. 2015. “The Impacts of Neighborhoods on Intergenerational Mobility: Childhood Exposure Effects and County-Level Estimates”. Harvard University and NBER. Chetty, Raj, Nathaniel Hendren, Patrick Kline and Emmanuel Saez. 2014. “Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States” Quarterly Journal of Economics, 129(4): 1553–1623. Chetty, Raj, Nathaniel Hendren, and Lawrence F. Katz. 2015. “The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment” Harvard University and NBER. Deming, David. 2009. “Early Childhood Intervention and Life-Cycle Skill Development: Evidence from Head Start”, American Economic Journal Applied Economics, 1:3, 111–134. Deming, David. 2011. “Better Schools, Less Crime?” Quarterly Journal of Economics, 126(4): 2063–2215. Deming, David, Justine Hastings, Thomas Kane and Douglas Staiger. 2011. “School Choice, School Quality and Postsecondary Attainment”. NBER Working paper No. 17438. Dobbie, Will and Roland Fryer. 2011. “Are High-Quality Schools Enough to Increase Achievement Among the Poor? Evidence from the Harlem Children’s Zone,” American Economic Journal: Applied Economics, 3(3): 158–187. Dobbie, Will and Roland Fryer. 2015. “The Medium-Term Impacts of High-Achieving Charter Schools,” Journal of Political Economy, 123(5): 985–1037. Heckman, James J. 2006. “Skill Formation and the Economics of Investing in Disadvantaged Children”, Science, 312, 1900. 6  BIS central bankers’ speeches  Hellerstein, Judith K., Melissa McInerney and David Neumark. 2011. “Neighbors and CoWorkers: The Importance of Residential Labor Market Networks,” Journal of Labor Economics, 29(4): 659–695. Hoxby, Caroline. 2003.