, and it is precisely some of these gaps that i want to discuss today, namely : - liquidity in resolution, the resolution approach to small and mid - sized institutions, avoidance of unlevelled playing fields, and the adequate treatment of systemic situations. the first issue to be addressed, as it affects all institutions alike, is the provision of liquidity to a bank in resolution. experience shows that market confidence in failing or likely - to - fail banks can only be restored on the basis of the external support it can receive, be it from an eventual acquirer ( as was the case with banco santander in respect of popular ) or elsewhere. and so far the question remains : what happens if there is no acquirer? how could other resolution tools be workable? if the resolution is carried out by means of a bail - in or bridge institution, arrangements should be in place to tackle the possibility of closed markets and deposit runs. if we do not equip resolution authorities with the proper mechanisms to provide the institution with liquidity, such tools will be rendered useless. in this field, the discussion is quite open. the single resolution fund could assume that role and, in that respect, the backstop the european stability mechanism ( esm ) will provide is a very welcome improvement. however, as ms. konig has repeatedly remarked, the srf ’ s resources may be insufficient to provide the significant amounts of liquidity that a systemic entity may need and, therefore, “ the srf would never be the sole answer to make sure a firm in resolution can continue to run with enough liquidity to meet its obligations ”. in this sense, proposals such as the ecb ’ s eurosystem resolution liquidity, which involves a fiscally neutral guarantee provided by the esm in favor of the srf, could be of paramount importance. a second issue i would like to touch upon is the need for an in - depth analysis of the framework for smaller retail institutions, particularly those typically funded by deposits. by now, there is a common understanding that we need to rethink the way to treat those in crisis. i am sure we are all aware of initiatives to develop special administrative liquidation procedures, and of alternative proposals on the need to extend the scope of resolution by reassessing the concept of public interest. my personal feeling right now is that both ways could be workable, and the argument i would like to present is that we should first try to agree on an optimal

08. 10. 2020 banking resolution : firm foundations for stability srb conference 2020 / session ii : resolution planning under the banking package : continuity and innovation pablo hernandez de cos governor good afternoon, ladies and gentlemen. let me begin by thanking the organisers, and the srb chair in particular, for giving me the opportunity to participate in this conference. five years have passed since the single resolution board was established as the resolution authority within the banking union. that is certainly a short time by institutional standards but, looking back, i would argue that the progress made has been significant. under the leadership of its chair, elke konig, the srb has finalised resolution plans – along with their mrel requirements – for all significant institutions. it has likewise fostered their resolvability, and has put in place effective mechanisms for cooperation with the national resolution authorities. all these arrangements have already proved their effectiveness. from a broader perspective, i would also argue that a more robust european crisis management environment has been conceived. harmonisation of procedures not only strengthens the banking union as it is ; i am sure it will also prove essential in future crossborder consolidation initiatives. bail - in has aligned incentives for managers and creditors alike in reducing excessive risk - taking. and, as a much wished intangible asset to a central banker like myself, the existence of a single fund is another milestone, partially mutualising risks in the euro area, which is moving forward with a more complete monetary union. all in all, if, as we are often emphasizing during this crisis, the post - crisis reforms have mitigated the risks to the sector ’ s financial stability, the implementation of the resolution framework has contributed to strengthening the banking sector in a crucial manner. identifying gaps for a more robust resolution framework in the eu accepting that we have made great advances in this field, we have to acknowledge also that there is still some way to go before we can truly assert our journey is over. first of all, it is important to recall that the european resolution framework is one of the three pillars of the banking union and it is essential to develop the third one – the much needed european deposit insurance framework – to ensure the resilience and well - functioning of this banking union. as this matter goes beyond the scope of this conference, i will rather concentrate on the second pillar of the banking union. so, entering into this resolution pillar, there are certain areas on which both policymakers and practitioners should concentrate