This paper examines whether the current prudential and resolution frameworks for large banks, finalized after the 2007-08 financial crisis, work as originally intended and whether there is room for further improvements. We focus our analysis on the banks of the European Banking Union classified as significant. We also analyse the banking crises of March 2023 and the initiatives under way at the international level to draw initial lessons from these episodes.
It is assessed that the interaction between the prudential and resolution frameworks is good. However, could improve: 1) the consistency between the assessments of a bank's systemic importance and its resolvability; 2) the coordination between the recovery and resolution plans; 3) the interaction between capital buffers and minimum requirements; 4) the information sharing between micro-prudential and resolution authorities, on one side, and macro-prudential authorities, on the other side.
