On the other hand, banks’ loss-absorbing capacity increased from 7.2% of total assets in 2007 to 16.9% or 55.5% of total assets in 2017, depending on the assumptions on the scope of the bail-in.
This increase in loss-absorbing capacity was due to the introduction of larger capital buffers and the new resolution framework, notably the bail-in tool and the potential intervention of the Single Resolution Fund.