Chart 3: Network of cross-references in the regulatory framework (provisions for UK deposit-takers, 2007 and 2017)  2007  2017  Note: Each node represents a provision, and each edge (line between nodes) represents cross-references between provisions. For 2017, we also show the legal source for each provision: CRR (yellow nodes), Rulebook (blue), EBA Technical Standards (red) and Supervisory Statements (green). The source for the 2007 network is the FSA Handbook (only prudential provisions for deposit-takers). For visual clarity, only nodes with at least one edge are displayed, and edges on the plot are unweighted, i.e. they do not show the number of cross-references. One way to put numbers on this is Google’s PageRank algorithm, originally designed to measure the centrality and importance of individual web pages. Chart 4 compares PageRank scores for the provisions in the 2007 and 2017 banking frameworks: you can see that connectedness increases most for the most central individual provisions. The full consequences of using and changing a handful of core rules are inherently broader in this new regulatory architecture. 8  All speeches are available online at www.bankofengland.co.uk/news/speeches  8  Chart 4: PageRank network centrality measure (provisions for UK deposit takers, 2007 and 2017)  Note: PageRank summarises the centrality of a node within a network. In this case, it counts the number and quality of cross-references to a provision to estimate how important the provision is. More important, i.e. more central, provisions are likely to get more direct and indirect links from other provisions.
Under this process, the system of burden-sharing among the national and mutualised funds will be gradually adjusted until the national compartments disappear completely around January 2025. The complex agreement reached has yet to be accepted by the European Parliament, so there is still uncertainty as to the final design of the mechanism. Moreover, the capabilities of the mechanism will foreseeably be limited at first, since the single resolution fund is constrained by its modest size and reduced mutualisation. Furthermore, for the time being, the agreement does not include common public mechanisms for the resolution of vulnerable banks after the available private funds have all been used up. 4  BIS central bankers’ speeches  In this respect, although the new resolution rules reduce the foreseeable scope of the required external funds, provision should be made for public financial support at EU level to ensure the orderly resolution of systemic banks if necessary. For example, following the example of the US, we could consider an arrangement in which the European Stability Mechanism could provide the resources needed to the common resolution fund with a charge to future contributions from the industry. Otherwise, the single resolution mechanism would, at least in the short-to-medium term, foreseeably be insufficient to prevent banking crises from continuing to be resolved with a charge to national funds, whether public or private. That said, the agreement reached should by no means be underrated.