The crisis has somewhat debunked the 'too big to fail' idea. But our contributors question Sharon Bowles on  the real strength of the Single Resolution Mechanism to save.

Saving failing banks: Who will foot the bill now?

https://api.multimedia.europarl.europa.eu/documents/20125/11794380/n004-0006-en.srt

Many steps have been taken in the  economic and financial crisis aftermath.

The biggest change  will see a Banking Union

and very importantly, a Single Resolution  Mechanism to control banks.

But will the new structure be enough?  We ask British MEP Sharon Bowles.

I don't really understand how you could all  have accepted an agreement

on a banking resolution  that everyone already knows will not work.

The issue of governance  is much too complex,

and there's such a lack of resources  behind it that if a new banking crisis erupts,

governments will once again  have to intervene.

It will not work. At least, this is what  the gentleman, a professor, is telling you.

I don't think that it's as bad as he says.

We cannot actually have the kind of system  that we would like

and that would work  under the existing treaties.

So we can't go to what would probably  be the perfect solution for everybody

without a treaty amendment,  so that will wait for the future.

The system that we have got  is very much streamlined

from the proposals  that the Council were making.

Most of the decisions are made  by the Single Resolution board.

If they don't agree, because on it they have  the various different representatives

from different Member States'  Resolution boards,

then the four permanent members  make the decision.

And on a few occasions,  when there's big use of a fund,

yes there is an extra layer,  but it's not that complicated.

Does what you're saying here  mean no new banking catastrophe

is possible at all, is that what I'm hearing?

I didn't say there's no new banking  catastrophe possible at all.

I'm sure there will be  some banking catastrophe.

The big question was over control,  but where will the political control be?

Usually, what has happened  is examined in retrospect

and I imagine that  that process will be exactly the same.

if needs be, there would be  parliamentary inquiries.

If needs be, there would be parliamentary  inquires in affected Member States.

Let's go to the next question.  Also almost the same issue.

80% of the European economy  is being financed by banks.

New regulation was necessary  to make the banking system safer.

And is all the new regulation  not going to come at an extra cost

Well, first of all,  we had the financial crisis

that was caused by over exuberance  and things that were actually wrong

in the financial system, with securitisation,  subprime mortgages and so forth.

Since then, we have also had scandals  to do with interbank lending rates,

we've had misselling, and now maybe  has been going on with foreign exchange.

that anyone in charge  of anybody else's money

has to be seen to have  the right levels of governance,

indeed more than  the right levels of governance.

We have had to have overkill  in order to create confidence.

I think it is probably true  that the pendulum of overkill

and we are already seeing that having  restored a certain amount of confidence,

there are certain areas  we are now going to look at again,

perhaps like securitisation,  as we've demonised all of securitisation

whereas some of it is in fact good,  and we need it.

So those revisions will happen  and that is probably the business

of the next Parliament and the next  Commission, so that will happen.

In terms of growth,  the original financial services action plan

was reckoned to have cost  half a percent of GDP.

Well, anything is cheaper  than another financial crisis.

This is a question everyone could ask,  if it really changed.

I would like to know whether the next  European Parliament

will ask the next DG MARKT Commissioner  whether he or she

intends to work on ending  'too big too fail' in the financial sector.

Too big to fail.  Is it still possible to talk like this?

Will the next Parliament  ask the Commissioner?

I'm sure that the next Parliament  will be asking the Commissioner what to do.

And of course, structural separation  is already on the table.

I think that there is a problem  with structural separation

because all of Europe's banks  will have to follow the US Volcker rule

that gets some of the derivatives  completely out of the group.

If you then impose a ring-fence  on top of something being totally separate,

the only economic way that a bank  can actually do that

is to say: this forces complete destruction  of the universal banking model.

And I know there are many ministers  that don't like that.

so, I think there is a lot to be debated

on whether there are other ways  in which we can do this.

I would also be saying,  do we have to look at the structures

where you have banks and asset  managers that are interlinked.

Sharon Bowles,  thanks for this interview.