So these are already two reasons to rethink the allocation of losses in bank resolution. The former is general and the latter is specific to the fragmented structure of the euro area. A third reason, which I will not discuss here, relates to the political economy of bank resolution.
Even if it were efficient for financial stability reasons to let taxpayers bear the burden of losses in resolution, it would be unpalatable to them, and it would be unfair unless they can exert effective control on the risk-taking behaviour of banks – which has not been the case so far.