No. 24 - The crisis management framework for banks in the EU - How can we deal with the crisis of small and medium-sized banks

The volume is a collection of the papers and contributions presented at the workshop organized by the Bank of Italy 'The crisis management framework for banks in the EU. How can we deal with the crisis of small and medium-sized banks?' held online on 15 January 2021.

The workshop provided the opportunity to reflect on the possible reform of the EU crisis management framework to increase the capacity of the authorities to manage the crises of small and medium-sized banks so as to avoid a destroying-value piecemeal liquidation and the related overall costs.

The volume contains the papers that were selected following a call for papers in September 2020, and is divided into the three workshop sessions.

The first session, preceded by a keynote speech by A. Enria (ECB), illustrates the different possible approaches to managing the crises of small and medium-sized banks: widening the scope of resolution (M. Schillig - King’s College London) or introducing a harmonized regime for orderly liquidation (M. Bodellini - Queen Mary University of London). This session includes proposals on how to finance resolution or orderly liquidation and the role of deposit guarantee schemes, which is highlighted in the paper by F. Restoy, R. Walters and R. Vrbascki (Financial Stability Institute). The discussant is T. Beck (CASS Business School).

A keynote speech by E. König (Single Resolution Board) precedes the second session, in which papers are presented by experts from the following authorities: BaFin (Germany), Banco de España and the Danish Financial Supervisory Authority. Their papers illustrate the experience acquired over the first few years that the rules were applied and make proposals for possible future reform. The discussant is E. Tornese (DG FISMA, European Commission).

Lastly, in the third session, opened with a keynote speech by A.J. Murton (FDIC - Federal Deposit Insurance Corporation), two papers are presented, one by N. Veron (Bruegel and Peterson Institute), which takes the American model as a starting point for some considerations on the possible reform of EU rules, and one by L. Shibut and G. De Verges (FDIC) on the approaches taken by the FDIC in the two crises of 1980-94 and 2008-13. The discussant is E. Carletti (Bocconi University).

The volume also contains the remarks made by the participants at the concluding round table, moderated by Deputy Governor A. Perrazzelli: C.M. Buch (Deutsche Bundesbank), A. Rivera (Ministry of Economy and Finance), J. Berrigan (DG FISMA) and F. Restoy (Financial Stability Institute).

The workshop was opened by the Governor of the Bank of Italy, I. Visco, and concluded by Deputy Governor A. Perrazzelli; their speeches are also included in the volume.

It is hoped that the workshop and the volume published today can contribute to the debate on the reform of the EU framework for managing bank crises.