in transparency and accountability. for example, the fpc will need to be able to defend its choice of stress against questions and criticisms that the scenarios are too extreme or not tough enough. that will implicitly be a healthy debate about objectives. at the micro - supervisory level, the pra board will need to explain some of its remedial measures using the published stress tests. this can make for a richer public discussion of prudential supervision, as well as encouraging firms to address latent vulnerabilities promptly. that brings me back to resolution. occasionally a firm will be revealed to be so feeble that major surgery is needed. sometimes recovery measures, overseen by the supervisors, will suffice. sometimes they will not, with a firm having to go into resolution instead. a sensible stress - testing regime – indeed effective supervision in general – cannot work without a welldesigned resolution regime. that should not be a surprise, but is in fact one of the great lessons of the crisis. conclusion over past decades, banking, and banking supervision, somehow got detached from the most essential truth : that banks can fail. thus, we have banks using brands that do not represent any legal entity, as if banks were simply trying to sell something, not running a business in borrowing and lending. we have an international regime that encourages but does not require adequate loss - absorbency in each and every entity within a banking group. we have had a regime that is focused on the capital needed in a going concern, but not on the organisational and capital structures that would help the authorities to contain disorder in the face of chronic distress. all those issues are now, i believe, in the open. there is a clear way forward on resolution. but there will have to be some consequential recasting of the international regulatory regime. of course, none of the reforms will be fool proof. mistakes will be made ; mistakes we cannot see. in future, it has to be possible to make running repairs to the regime where faultlines are exposed. stress testing – not only of banks but of ccps and, in time, of other intermediaries – can help to expose those faultlines. it can help to calibrate macro and micro prudential policy. and a good stress - testing regime will make it easier to explain and defend the standard of resilience that the bank requires. and for that, the bank can be held to account. bis central bankers ’

across the whole ssm area. this would also be true if we refer to an unauthorised exercise of banking activity : with the european dimension of banking supervision, the transnational dimension of such offences does seem to exist per se. my focus today has been on the genesis of the ssm and on possible leverages to remedy some internal weaknesses within the mechanism. the ssm cannot still be deemed a self - contained system, but rather a part – albeit the key one – of that banking union which, ten years after the founding regulation of the ssm, has still not been fully completed, especially on the front of crisis management and depositors'protection. it goes without saying that no banking supervision mechanism – no matter how efficient – can extinguish the risk of banking crises, especially when considering the unending transitions to which the advanced banking sectors are subject in the digital era, as the recent collapse of some us regional banks shows. following the further postponement of the european deposit insurance scheme announced by the euro group at its meeting of 16 june 2022, the commission – on the basis of the outcomes of that same meeting – presented a proposal last april for a revision of the crisis management and deposit insurance framework. 4 / 5 bis - central bankers'speeches on the one hand, the proposal – which takes into account many of the suggestions we voiced in recent years – definitely includes some positive elements that could ease the crisis management for small and medium - sized banks, especially insofar as it enhances the potential for deposit guarantee schemes to intervene to support a transfer of assets and liabilities, both in liquidation or in resolution, and to ensure an orderly exit from the market of failing banks. on the other hand, some critical issues remain : the enlargement of the scope for resolution should be guided by the principle of proportionality, requiring an assessment of the bank's actual capacity to issue minimum requirements and eligible liabilities, which in the commission's proposal remains the main source of funding for resolution, and the lack of financial stability exemption for addressing systemic crises, such as the one adopted to solve the recent banking crises in the united states. this is not the time to enter into the details of this very technical debate, but – in my view – it is not possible to outline the perspectives of the ssm without considering the frontiers of crisis management. i leave these thoughts to the eminent panellists of today's conference, which is intended to be an occasion