After all, the taxpayers will foot the bill if things go wrong. The absence of credible resolution plans for SIFI groups and mortgage banks distorts incentives and competition within the sector. Indeed, the Competition Council's conclusion is that credible resolution plans must be prepared for the large mortgage banks and that they must be supported by MREL or perhaps by additional capital.
If the exemption is repealed, this will increase competition to the benefit of borrowers. Slide 7: Should the government pay? The purpose of the Bank Recovery and Resolution Directive was to ensure that banking crises do not jeopardise whole economies.