On the whole, risks could be systematically underestimated, and the value of collateral for lending operations could be overstated. The surprise that sets in when the opposite occurs is all the greater. In the financial markets, surprise news leads to abrupt price corrections – as was shown by the markets’ response to the Brexit vote.
Second, we should establish a Union-level resolution system – the Single Resolution Mechanism, which should go hand in hand with the Single Supervisory Mechanism as far as the scope of banks and countries is concerned. That is, the Single Resolution Mechanism should cover the entire euro area banking sector plus banks in those non-euro area countries that wish to join the SSM.