Looking ahead, the Single Resolution Mechanism, the centrepiece of which is the bail-in instrument, will provide an improved toolkit for dealing with struggling banks, thus ensuring that private sector owners and creditors will be forced to share the cost of restructuring or resolving banks.
If banks sustain losses in the future, private funds will have to be used to absorb these losses in accordance with a clearly defined liability cascade. Only if these funds are insufficient will it be possible to take recourse to the European Single Resolution Fund (SRF), which is financed by the banks themselves. Public finances can only be used as a last resort.