resolution is sold, the purchaser assumes any liquidity commitments that may arise when the bank opens its doors the next day. however, if the resolution is carried out by means of a bail - in, there must be arrangements in place in case, when the doors open, some of the funding providers decide to withdraw their funds, because they have been affected by the bail - in, because they believe the bail - in has not been sufficient, or simply because they prefer not to run the risk of waiting to see what happens to the institution. in such cases it is essential to ensure that there are sufficient mechanisms in place to provide the institution with liquidity, to grant credibility both to the resolution tool and the resolution process. in view of how other advanced countries have solved this problem, the solution, in my opinion, could be to involve the central bank as a funding provider, with all due public guarantees provided jointly. however, if any or all of the guarantees were to be enforced, it would be important to ensure the fiscal neutrality of the mechanism in the medium term. third, insolvency regimes in europe must be harmonised. if we have common supervision and resolution schemes for banks in europe, i believe we should also have harmonised arrangements for winding up banks. this would require having a separate insolvency regime for banks, given their idiosyncrasies and the negative externalities that lengthy and inefficient winding up processes may have for other banks, deposit guarantee schemes and the real economy. this should be a common insolvency regime for all the countries of europe. the srb and the national resolution authorities could play a fundamental role, acting as insolvency administrators, with similar instruments and criteria to those already in place at the european level for resolution of public interest entities ( asset separation, sale, bridge bank, etc. ). this is not an easy challenge to address, but it is important to analyse its viability and how it may be phased in. 6 / 7 last but not least, we must complete the banking union. and we all know what that entails : establishing a common european deposit insurance scheme, by a specified date. we need to ensure that all european citizens ’ bank deposits up to €100, 000 are equally secure, irrespective of the institution holding the deposits and of the depositor ’ s country of residence within the banking union. once again, if banking supervision and resolution is central

( mrel ) that make it possible to comply with the paradigm shift i have just referred to. the srb has also put in place effective mechanisms for cooperation with the national resolution authorities that ( like the frob and the banco de espana ) participate in the drawing up of resolution plans and in determining the mrel, and in implementing decisions taken by the srb, as well as developing their own responsibilities for less significant institutions. i should like to underline the importance in these european resolution arrangements of the requirement that european credit institutions ( including spanish ones, naturally ) have sufficient levels of mrel. the paradigm shift from a bail - out to a bail - in system, and the other tools permitted by european legislation, require that banks have a sufficient level of mrel so that, if the case arises and there is a public interest involved, the institution can be resolved, while minimising the burden on the taxpayer and ensuring the continuity of critical functions and a minimum impact on the rest of the financial system. for some institutions, this requirement represents a considerable challenge for the coming years. it should prompt them to make adequate planning, to retain sufficient own funds and to issue mrel - eligible debt, and to take any opportunity that may present itself to comply with the requirements within the period established for the purpose. 5 / 7 challenges remaining on the resolution front in europe despite the tremendous efforts made on the resolution front in europe, there are clearly important challenges remaining. first, the details of the backstop for the single resolution fund ( srf ) must be outlined. recently it was agreed that the european stability mechanism ( esm ) would assume this financial backstop, which would take the form of a credit line, to be used to address exceptional situations where the srf ’ s own resources prove insufficient for resolution of certain credit institutions. the backstop will have a limit of 1 % of the deposits guaranteed in the banking union. it will come into force in 2024 at the latest and must be fiscally neutral in the medium term, so the resources committed will subsequently be recovered through banking sector contributions. in addition, the introduction of the financial backstop will eliminate the esm ’ s tool for direct recapitalisation of banks. in this setting, it is vital to ensure that the backstop is sufficient to meet all the potential challenges that the srf may have to face. second, the question of provision of liquidity in bank resolution has to be addressed. if a bank under