However, such growth strategies should perforce provide economic opportunities for the poor to earn income and participate in the development efforts of their respective nations as responsible citizens. This growth strategy, known as inclusive growth, would enable a country to universalise the availability of income earning opportunities to all citizens alike. There are certain prerequisites which have to be satisfied for a country to gain the best results out of such pro-poor growth policies 6 . Since the main asset which the poor possess is  4  In fact, the expected socio-economic explosion occurred during 1988-92 in the form of an ultra-leftist youth insurrection in the southern parts of Sri Lanka. See, Report of the Presidential Commission on Youth, 1990. 5  The World Development Report 1990 on Poverty reports that the achievements by some countries in this respect have been dramatic: Indonesia within a generation reduced poverty from 60% to 20% in 1970s and 1980s, p 1. 6  Pro-poor growth implies faster growth of income of the lower income categories so that it would not only help the low income people to cross the poverty line but also would bring about a narrowing of income distribution as well. See, World Bank, Economic Growth in the 1990s (2005), p 121. 2  BIS Review 22/2008  their own labour, it is these labour services which they could transform into income earning opportunities.
Moreover, although the minimum 8% bail-in envisaged in the regulation and the € billion resolution fund established by the Intergovernmental Agreement accompanying the SRM Regulation will probably provide a sufficiently large buffer to meet resolution costs in most cases, it remains to be ensured that a suitable public backstop – for instance in the form of an ample credit line for the Singe Resolution Fund – would also be available, following the example of other jurisdictions, such as the US. 4  Lessons from the Spanish experience  Finally, let me comment on some of the lessons learnt from the Spanish experience. Amid intense debate on the precise specifications of the resolution framework, but before the BRRD was approved, Spain passed in 2012 a relatively ambitious legislative reform which anticipated many of the main features of the Directive. That new legal framework allowed the Spanish authorities to employ new resolution powers – alongside public support – to resolve as many as five financial institutions and to restructure four more under the financial assistance programme. In all cases, previous shareholders were almost completely wiped out (in six institutions) or suffered considerable dilution. Junior debt holders were also bailed in to generate around € billion in new capital. In addition, all nine banking groups receiving State aid were required to transfer problematic assets to an external asset management company at prices that were administratively set.