Hence, to ensure the stability and sustainability of the euro area, making banks resolvable is essential. As this session is about the road ahead for resolution, let me raise two specific issues for discussion. The first one concerns pressure on regulators to soften rules designed following the financial crisis.
It is often said that financial regulation moves like a pendulum, swinging back and forth between opposite states. When a crisis occurs, there is a call for tighter rules, and the pendulum swings. Over time, as memory fades, there is a push for deregulation and fewer rules. Thus the pendulum swings back, possibly sowing the seeds for the next crisis.