It is now the owners and creditors who must bear the losses of a distressed institution. And it is at least as important to be wellcapitalised in the eyes of the market as in the eyes of the supervisory authorities. Important work is underway in relation to resolution planning for credit institutions.
As regards the mortgage banks, it is chiefly a question of ensuring that the authorities can handle a distressed mortgage bank. Without the use of taxpayers’ funds. And in such a way that the lending capacity of the institution is retained and there is no knock-on effect on the rest of the system.