Euro Area: Publication of Financial Sector Assessment Program Documentation-Technical Note on Financial Sector Safety Nets

International Monetary Fund

No 2025/207, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper presents a technical note on the Euro Area’s (EA) Financial Sector Safety Nets. The build-up of loss-absorbing capacity in European banks is a major achievement, allowing EA banks to weather several major shocks. However, operational readiness still requires critical reforms to address remaining gaps and inflexibility in the financial safety net. A unified crisis management regime is needed to handle the rapid failure of potentially systemic banks. Notably, the banking union (BU) lacks a BU-wide deposit insurance system, and progress on its introduction has stalled. Additionally, arrangements for banks’ access to liquidity in resolution remain inadequate. The governance and decision-making processes of the Single Resolution Board, including the use of the Single Resolution Fund and the European Stability Mechanism Backstop, are highly complex and depend on rapid consensus among national resolution authorities or member states. Streamlining these processes is essential for effective crisis management.

Keywords: C. bank Resolution authority; E. financing bank Resolution; G. implementing resolution tool; resolution directive; D. deposit protection; Bank resolution framework; Bank resolution; Financial sector stability; Crisis management; Crisis management framework; Global (search for similar items in EconPapers)
Pages: 44
Date: 2025-07-25
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=568936 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfscr:2025/207

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Staff Country Reports from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().