BRRD: Demand grows for better, faster liquidity in resolution

Demands for unlimited liquidity for European banks in difficulty betray regulatory nervousness over the risk of a future Banco Popular-style bank run.

Liquidity, liquidity, liquidity.

That was the recurring theme of discussions at a Single Resolution Board (SRB) meeting on bank resolvability in Brussels on October 15.

Dominique Laboureix 160x186

Dominique Laboureix

“Liquidity is not well covered by the regulatory framework. This is the missing element,” admitted Dominique Laboureix, member of the board and director of resolution planning and decisions at the SRB. 

“This is well recognised now by all stakeholders. It is not enough to work on private sources of funding. We need a solution with some support from those that are able to provide liquidity to finalise decisions that we can make at SRB level: the central banks.

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