The provision of potentially significant amounts of liquidity in times of crisis is a prerequisite for successful resolution. The framework for the ECB to provide "Eurosystem resolution liquidity" has yet to be built. The other priority, at the other end of the spectrum, is to shift from resolution "for a minority" - a far too  Page 7 of 9 small minority of cases: two in the last nine years - to resolution "for the majority" of cases, including small and medium-sized banks. The European Commission's proposal for a revised crisis management and deposit insurance framework is a step in the right direction. Yet, greater pooling between the Resolution Fund and deposit guarantee schemes is debatable, as is the fact that large companies would potentially benefit from the same protection as the smaller deposits of individuals or small and medium-sized enterprises. Five more "thematic" risks also call for more stringent measures, some of which are already in place. With regard to customer protection and the sound supervision of business practices, Jean-Paul Faugère and I had clearly requested greater transparency - and moderation - of unit-linked life insurance fees. Fortunately, discussions with industry professionals have gathered pace in recent days to establish a system that better serves the interests of customers. Our objective is to significantly bolster the measures proposed last December by France Assureurs to ensure that unit-linked policies that are both overpriced and underperforming are more effectively removed from commercial offers. The industry should make a public announcement detailing these measures by next week.
Luis de Guindos: Key vulnerabilities for euro area financial stability Remarks by Mr Luis de Guindos, Vice-President of the European Central Bank, at the meeting of the Financial Stability Contact Group, Frankfurt am Main, 2 October 2019. * * * Let me start by thanking you all for participating in this meeting of the Financial Stability Contact Group. These meetings are a key feature of the ECB’s market intelligence gathering activities. The financial stability environment has certainly remained challenging since this group last met in March. The global economic outlook has worsened since then, and political and policy uncertainty has increased in a number of areas. Taking this into account, we continue to see four key vulnerabilities for euro area financial stability: (i) first, a risk of mispricing of some financial assets; (ii) second, high public and private sector indebtedness in several countries; (iii) third, in view of banks’ subdued profitability outlook, we see a risk of hampered bank intermediation capacity; and (iv) fourth, vulnerabilities stemming from increased risk taking in the non-bank financial sector. We see the likelihood of these vulnerabilities unravelling in a disorderly manner over the next 18–24 months as remaining largely unchanged. This is because the now widely expected “lowerfor-longer” interest rate environment mitigates many of the possible triggers for corrections over the short to medium term.