That’s why – and this is what the legislation provides – the levies to be paid by banks to the fund include a riskweighted component in addition to a flat levy. Not every bank will pay the same amount, therefore. The single resolution mechanism is intended to ensure that banks can be wound down more efficiently than in the past.
This will reduce the costs of resolution and hence the potential burden on the single resolution fund. Another side effect will be to reduce the urgency of having a single European deposit guarantee scheme. If banking supervision and resolution are conducted at a European level, the probability of banks defaulting should fall.