However, given the role of banks in the financial system and in order to safeguard financial stability, the supervisor has to feel confident that the resolution of banks is conducted in an orderly fashion. This brings me to the second pillar of the Banking Union. The establishment of the SRM is the second crucial step towards addressing financial fragmentation and breaking the sovereign-bank nexus.
The main point here is that the orderly resolution of banks, even big ones, may contribute to avoid costly rescues by sovereigns that may endanger their own finances. The SRM puts in place a single authority responsible for the resolution of banks in the euro area and participating Member States.