International cooperation is indeed of great importance to supervisory and resolution authorities and deposit insurance systems (DISs).Globalisation has prompted us to decide and act jointly to address the financial crisis and to prevent new ones. We now know that a financial crisis cannot be resolved by countries and/or authorities acting independently. It is not only a matter for DISs but also for all other bodies involved in financial stability: central banks, supervisors, capital markets authorities, accounting standards setters, etc. The FSB  BIS central bankers’ speeches  1  has taken the lead in initiating reforms and in helping to implementing common principles at the local level. As regards deposit insurance, the International Association of Deposit Insurers was created in 2002 as a direct result of the early understanding of the importance of international discussion and practice-sharing between DISs. Progress made in this field has been tremendous. The momentum created by international authorities and standards-setters has actually been crucial International common standards are key because they embody common understanding and analysis. They are safeguards of the level playing field and of orderly problem solving. The Core Principles for Effective Deposit Insurance Systems drawn up by the IADI in cooperation with the BCBS, regularly updated and supplemented for instance by the guidance on ex-ante funding, are a perfect example in this respect.
Let me be clear, however, that in an event that the credit line to the backstop would temporarily be drawn upon, it will be subject to the principle of fiscal neutrality, i.e. the banking sector will ultimately be liable for repayment by means of contributions in all participating Member States, including ex post contributions. reject to it. If the Council approves the proposal of the Commission, the Board must modify the resolution scheme accordingly within 8 hours. 12  8  In the first instance, national compartments of the directly affected Member States will be used, up to a predefined limit set for each year in the transition period. This limit will decrease during the transition period. Starting at 100% in the first year, it will decrease to 60% and 40% for the second and third year, respectively. Thereafter the limit will decrease linearly for the subsequent years. As a second step, only if the first step was insufficient, available means in all compartments – including the ones just used – will contribute up to another predefined limit, also set for each year in the transition period. As I mentioned earlier, the pace of mutualisation is substantially frontloaded, starting at 40% in the first year. It will increase to 60% in the second year and thereafter increase linearly for the subsequent years until it reaches 100%. As a third step, to be used if the previous steps were insufficient, any remaining resources in the national compartments of the directly affected Member States will be used.