The Single Resolution Mechanism and the Bank Recovery and Resolution Directive (BRRD), which assure the harmonised implementation of the rules throughout all member states, substantially strengthen the principle of individual responsibility in the banking sector, thereby reducing the likelihood of public bail-outs.
However, the first line of defence in making a bank resolution less likely is the establishment of higher capital requirements for banks as it was already decided in principle by the Basel Committee on Banking Supervision almost exactly six years ago. That’s why the timely implementation of Basel III is important.