In the latter case there is a need for a clear separation of functions between the ECB as monetary policy-maker and supervisor. BIS central bankers’ speeches  5  The SRM – a necessary complement to the SSM For banking supervision to be effective, a Single Resolution Mechanism (SRM) is also indispensable to resolve non-viable banks.
Without an SRM, we might face a misalignment of incentives between the supervisory and the resolution functions. Moreover, the supervisor’s judgments must also be enforceable. The Commission recently proposed setting up a single resolution authority backed by a single bank resolution fund. The authority and the fund must be separate from the SSM, independent and supranational.