elisa ferreira : resolution and early supervisory intervention topics supporting address by ms elisa ferreira, vice - governor of the bank of portugal, on the panel discussion of " resolution and early supervisory intervention " at the " bcbs - fsi high - level meeting for europe on banking supervision ", lisbon, 18 september 2018. * * * accompanying slides of the speech. the firm, cohesive european commitment to banking union helped counter financial fragmentation but its incomplete setup seriously jeopardises its key benefits. as the ssm was put in place and the srm started working, the political will to build the third pillar – a european deposit insurance scheme ( edis ) – and complete the overall architecture waned. new, bigger political hurdles continue to emerge with policymakers stuck in the risk - reduction vs. risk - sharing debate, losing sight of the final objectives. today, banking union means that supervisory and resolution decisions are mostly european, whilst the ultimate guarantor of financial stability remains national, with limited tools to act. the meseberg declaration and last june ’ s euro summit, by falling short again of proposing further risk - sharing while adding additional layers of risk - reduction measures, lead us to ponder whether the costs of attaining additional risk - sharing are worth the risks to financial stability that such measures may trigger. an unstable balance has emerged from the lack of political will to complete the banking union preventing us from fully reaping the benefits of economic integration. europe needs to have concrete plans going forward, and must address pressing questions on what we need to adjust to guarantee financial stability. 1. treatment of cross - border banking groups without edis, as banks are to a large extent, still “ national in death ”, instead of discussing the adoption of waivers, a specific regime needs to be developed to address member states ’ concerns over the risks of potential failures of cross - border banking groups. member states need tools to address financial stability issues arising from locally systemic undertakings. this involves : the rethinking of the single point of entry ( spe ) / multiple point of entry ( mpe ) resolution model ; the choice between subsidiaries or branches, together with the supervisory powers of host national competent authorities ( ncas ) ; and openly debating the contentious topic of ring - fencing measures. the transformation of subsidiaries into branches has emerged as an answer to this debate – however that implies, at least, that : national resolution authorities are involved in the definition of resolution plans and actions when local undertakings are

, no conceptual changes to the pact are necessary ; instead, all member states need to have the will to comply with the agreed rules. that would not only avoid overtaxing future generations ; it would also make a major contribution to achieving faster growth and more employment. after all, public confidence in the future can be strengthened only by a fiscal policy that is predictable and based on government finances which are sustainable in the long term. by contrast, a lack of confidence in the future gives rise to uncertainty, encourages greater precautionary saving and reduces the propensity to consume. if the emerging upturn is to be sustained, we need fiscal policy consolidation together with clear economic policy guidelines and ambitious structural reforms. by contrast, an anti - cyclical fiscal policy would work, at best, only in the short term and, as a rule, would have little quantitative effect. in the long term the ensuing increase in debt would impede dynamic economic growth. the upshot is that we must restore the confidence of the german public and our european partners in the sustainability of german fiscal policy. this would also make it easier for monetary policy makers to guarantee sustained price stability and low interest rates in the euro area. 2. 4... in the gold reserves ladies and gentlemen that part of the bundesbank ’ s reserve assets that is held in gold has frequently been the object of desire. and so in the present difficult budgetary situation there is no lack of suggestions on how this asset could be used. the bundesbank decides on gold sales in accordance with the gold agreement it concluded with the other g - 10 central banks. the use to which the valuation gains realised from possible gold sales is put is decided by parliament within the framework of the statutory regulations governing the use of the bundesbank ’ s profit. it is only the realised valuation gain that can be distributed. the precise amount depends on the gold price and the dollar exchange rate at the time of the sales ; if the sales option now included in the new gold agreement of the g - 10 central banks were to be exercised in full, a sum of no more than several billion euro would accrue within five years given the present market situation. by way of comparison, we might consider that the federal budget for 2004 amounts to €257. 3 billion, €29. 3 billion of which is financed by means of net new loans. consequently, sound fiscal planning disregards any sizeable financing potential from the gold reserves or any significant