One controversial issue is whether the resolution framework should be further centralised to
the Euro area level. On the one hand, this would allow reducing political interference in banking further and it would allow for more effective resolution as there are more good bank candidates for a P&A operation in the Euro area than in any given country.
On the other hand, there are still significant cross-country differences in legal frameworks and market structure across countries that might make a completely supra-national approach inefficient and slow. Industry-based deposit insurance schemes and
institutional protection schemes (as, for example, in Germany) complicate things further in terms of funding and resolution. A SSM-like solution, where resolution (i.e., tools beyond insolvency) for most banks is on the national level, but under the umbrella
of the SSM, and with the largest and cross-border banks directly subject to SRB resolution, might thus be preferable to a completely centralised solution, at least in the medium-term. Further legal convergence on bank insolvency is needed, however, for
such a step.