a goal being evaluated at an amount of eur 55 billion, this amount has been constantly revised, and the srf represents today eur 66 billion and will reach around eur 80 billion next year. this sharp increase can be mechanically explained by the surge in deposits in the wake of the covid crisis and “ forced ” savings. the fact remains that this very high amount has never been used so far : we cannot completely ignore this question. it can be discussed whether this amount is disproportionate compared with european banks ’ level of risk. if the answer is yes, then we should contemplate introducing a ceiling in absolute terms – the level of which would have to be determined. we should also use the flexibility offered by the current regulation to alleviate the burden of the contributions for banks, so that irrevocable payments commitments can represent up to 30 %. all these questions need to be examined. ii. why and how supervision and resolution authorities should work more closely with one another let me now turn to the way in which the two completed pillars of banking union, namely supervision and resolution, could become more consistent with one another and work more closely together. cooperation between the srb and the ecb does exist, and is formalised by a memorandum of understanding. this provides for ex - ante cooperation in calm times, and close cooperation in early intervention and resolution phases. thanks to this tremendous ongoing preventive work conducted by the ssm and the srb, and to continued efforts from banking institutions, recovery plans have significantly improved in recent years. page 4 sur 5 beyond the current areas of cooperation, which could still be enhanced in practice, greater coordination on policy issues appears desirable. in particular, policy decisions that pertain to own funds have a very concrete impact on european banks ’ competitiveness, and therefore on the level playing field with foreign banks. here, we must find a trade - off between safety and competition issues, with efforts needed on both sides. for instance, the ssm could further consider a risk - based approach rather than a flat - rate approach to estimate post - resolution pillar 2 requirements. this entails a need to take into account a forward - looking approach and the expected risk reduction that follows a resolution. this should be acknowledged in the calibration of external minimum requirements for own funds and eligible liabilities ( mrel ) : banks are not at the same stage today as they were seven years ago. the resolution authority could, in turn,

funding. a locom accounting model applied to such instruments is not consistent with this important management function. we have always expected banks to regularly review the fair values of all their securities. but the concept of “ tainting ” due to realized losses from the available - for - sale portfolio had not been widely applied in such a narrow way. covitz, daniel and steven a. sharpe, “ which firms use interest rate derivatives to hedge? an analysis of debt structure and derivative positions at nonfinancial corporations, ” working paper, july 2004. i commend the financial accounting standards board ( fasb ) for listening to questions raised by preparers, auditors, and bank regulators and agreeing to defer the effective date for the troublesome paragraph 16 from the third to the fourth quarter. it has also issued some implementation guidance, and has a comment period that runs until october 25. i would encourage you to read the new guidance, and to provide comments if you feel additional clarification is needed. pay particular attention to the facts and circumstances that should be considered. note that the guidance allows sales of available - for - sale securities at a loss for the same reasons that you can sell held - to - maturity securities without tainting the remaining portfolio, for example mergers and changes in regulatory capital. the guidance also permits sales for unexpected and significant changes in liquidity needs or increases in interest rates. in practice, eitf 03 - 01 should make all organizations with available - for - sale securities review their procedures for identifying impairment. clearly, investors should continue their current practice of monitoring for credit downgrades and changes in prepayment speeds, especially for mortgage - backed securities booked at a premium and interest - only strips. but in addition, the trigger for recognizing impairment is no longer an intent to sell, but rather whether the investor no longer intends to hold the security until fair value recovers to its amortized cost. also note that the disclosure aspects of eitf 03 - 01 do apply in third quarter financial statements. the major change is separate disclosure of securities whose fair value is below carrying cost. organizations now must disclose separately the amount of securities that have been in a continuous unrealized loss position for more than one year, and in the narrative discuss why the loss has not yet been recognized. fair value and regulatory capital issues as you know, the basel ii effort to revise bank risk - based capital standards is now in its final stages and moving toward implementation. importantly