Ladies and gentlemen,
It is an honour to speak to you to mark the 10th anniversary of the Single Resolution Mechanism, a cornerstone of our Banking Union. I wish I could have joined you in Lisbon.
It is important that we mark these milestones and recognise how much work has gone into getting us to where we are now.
Ten years may not seem like a long time when compared to the long life of financial institutions and markets, yet in those years we have laid down important foundations, faced some unexpected challenges, and achieved real, measurable, improvements. And we have also seen the framework tested in real life situations – including in Portugal.
Today, I think it would be useful to take the time to reflect upon where we came from and where we are today, including our focus for the future.
The Banking Union was created as a response to the financial and sovereign debt crisis. At that point, European banks portfolios featured significant shares of non-performing loans and excessive sovereign exposures. We also had no tools for managing bank failures in an orderly way, which often meant that taxpayers had to be called upon to bail out the banks.
As a former Minister of Finance during these challenging times, I experienced first-hand the difficulties in addressing these situations.
In the wake of the sovereign debt crisis, several Portuguese banks needed public support to stabilise their balance sheets. Their capital positions were fragile, and authorities had to handle failures using national resources. Similar situations occurred elsewhere, in Spain, Ireland and Greece notably.
Ten years on, the picture is very different, including in the country I know best.
Thanks to the establishment of the Single Supervisory Mechanism and the Single Resolution Mechanism, the development of the single rulebook, and the efforts put in by national authorities and by banks, we have made significant strides.
European banks are now better capitalised, and their liquidity and funding structures are stronger.
Between 2015 and 2025, the average CET1 ratio of significant institutions in the Banking Union has risen from around 12 percent to 16 percent, and average total capital ratios are now around 20 percent. The liquidity coverage and net stable funding ratios are comfortably above the minimum requirements. These are reassuring figures. They show us that our banks are resilient and able to support themselves in times of crisis.
A significant amount of work has also been put into cleaning banks balance sheets. In the Banking Union, the ratio of non-performing loans has decreased sharply - from 7.5 percent to less than 2 percent over the same period.
There has also been some progress on reducing Euro area banks exposure to sovereign risk. Government bonds now represent a smaller share of Euro area banks holdings than a decade ago, and the domestic concentration has also declined.
All of this meant that European banks were well placed to withstand the external shocks of the recent past. From the COVID-19 pandemic to the war in Ukraine and the 2023 banking turmoil in the US and Switzerland.
Beyond the increased resilience of European banks, meaningful progress has also been made on the resolution side of the equation. This ensures that, if a bank were to fail, authorities are sufficiently prepared to handle their resolution in a way that protects financial stability, taxpayers money, and preserves confidence in the financial system.
The Single Resolution Board has been in operation since 2015. Together with the national resolution authorities, resolution plans have been put in place for each banking group, and a lot of work has been done on increasing preparedness on both the side of the banks and the authorities.
Banks have been increasing their loss absorption capacity steadily. As of end-2024, the minimum requirement for own funds and eligible liabilities resources of significant institutions in the Banking Union were around 34 percent of total risk exposure amount, on average.
The Single Resolution Fund has met its target level and now holds around 80 billion euros, ready to be deployed as needed. The national deposit guarantee schemes have together already collected 55 billion euros.
All of this means that when trouble emerges, whether from macroeconomic shocks, or geo-political risk, European banks and authorities are far more prepared than ever before.
This is proof that the Banking Union delivers tangible results, strengthening national systems while enhancing stability for the euro area as a whole.
However, we have not finished all that we have set out to do. I am committed to ensuring that the progress continues, and that the EU financial system becomes ever more resilient.
Cross-border mergers in the Banking Union remain rare. I know that there are many reasons why this is the case: legal barriers, lack of trust between authorities, fiscal asymmetries, national ring-fencing, domestic biases, the list goes on. Even the cross-border provision of banking services remains limited.
In the end, it is European citizens and businesses who lose out. They deserve to experience the real, tangible benefits that a true Single Market for banking can deliver.
I acknowledge that any discussion on next steps towards a more integrated banking market must consider the concerns expressed by host authorities and must define safeguards that strike the right balance between integration and financial stability.
But the fact is that a true single market for banking would allow us to become more competitive as an economy. Strong banks operating on a cross-border basis have the potential to deliver better and cheaper banking services and more affordable financing.
This would bring tangible benefits to citizens and businesses, but it would also be a considerable step towards improving the competitiveness of European banks and indeed of the European economy.
At the same time, developing a robust deposit insurance framework must consider the context and challenges that we are facing today. This would help maintain depositor confidence across Member States, reinforcing both financial stability and market integration.
President von der Leyen mandated me to further develop the Banking Union and identify a way forward on the European Deposit Insurance Scheme. We will continue to work hard to deliver on this mandate. The EU banking sector and the regulatory framework have seen significant developments in the past ten years, and any new approach on EDIS will need to reflect this.
Next year, the Commission will publish a report assessing the overall situation of the banking system in the Single Market, including the evaluation of the banking sectors competitiveness and how we can further develop the Banking Union.
As we celebrate this milestone in Lisbon, let us not be complacent. Our continent faces immense investment needs, and without taking the next step in integration, we will not be able to meet them, nor to stand on equal footing with the worlds largest economies.
We need the buy-in of all Member States to move this project forward so that we can continue to invest in ourselves, in our shared future, and in the generations to come.
The last decade has shown that when Member States, EU institutions, and banks work together under a harmonised, credible framework, we make Europe safer, more stable, and more competitive.
The next decade must be about making this framework even more integrated. We are focused on breaking down remaining barriers, ensuring resolution is truly effective no matter where a bank is located or where it fails. We will continue to reduce fragmentation to give Europe a banking sector that supports growth, innovation and stability in all Member States equally.
As we celebrate this tenth anniversary, I want to congratulate you all for your dedication and achievements. Together, we have made Europes banks stronger and taken an important step towards deeper economic integration. But this is not the end of the journey — it is the foundation for what comes next. Let us build on this success to shape a more resilient, more integrated, and more confident Europe for the future.
Thank you.
