Banks

Banks are at the heart of our financial systems and critical to the working of our economies. If you want to know more have a look around this page where we will outline how banks work and how they are being reformed in a way that everyone can understand. We will be adding to this section in the coming months - so do not forget to check back soon.

The importance of banks to the economic system is, however, why they are also at the heart of the financial crisis. Across the spectrum there is agreement that we need a major overhaul of our banks and banking rules if we are to have a sustainable, stable financial system and economy. Finance Watch has some clear ideas on what needs to be done for the public interest to regain sovereignty over the banks.

Recently…

Our most recents publication are our short note "Separating fact and fiction" debunking a number of misleading claims about bank structure reform and our Policy Brief "Separating universal banks from too-big-to-fail banks (TBTF)" that illustrates the very different characteristics of Europe's small, medium and large banks. Another recent publication, "Too-big-to-fail (tbtf) in the EU", provides an overview of the EU financial regulations (passed or still in discussion) related to the too-big-to-fail issue and an assessment of what remains to be done.

There is also a detailed note on bank separation from April 2013 designed to be read by politicians and newcomers to the subject alike, and a technical factsheet on bank separation for journalists.

In September 2013, we have published a longer report on Banking Union, and why it won’t work unless large universal banks are restructured. Here are the key points in one page.

Our multimedia dossier "Understanding Finance #1: Splitting megabanks?" gives you a non-technical overview on the issue of bank separation and explains Finance Watch's position on this crucial issue.

In May 2013, we took the occasion of a hearing at the Bundestag on the application of the Capital Requirement Directive in Germany to make a general assessment of CRD IV - the application of Basel 3 recommendations in European law.

We’ve made webinars to explain what universal banks do and to discuss possible laws to separate deposit taking banks from investment banks.

And we have a cartoon which illustrates the problems of imbalance caused by banks which are too-big-to-fail #tbtf

 Cartoon tbtf

The “dossiers”

Although bank reforms are all connected they are separated into different pieces of legislation:

  • Bank Recovery and Resolution – tries to introduce a way for national authorities to deal with failing banks, other than simply bailing them out, without harming depositors and payment systems.
  • Bank Separation – should try to separate those bits of banks that must be saved from those that could fail like normal businesses.
  • CRD4/CRR/Basel III - requiring banks to fund themselves with more capital, so they are less likely to need public money when things go wrong.
  • Banking Union – contemplates European mechanisms to supervise banks better and help them to fail without causing excessive damage to the economy.

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Cartoons

Finance Watch cartoon Finance Watch cartoon Finance Watch cartoon

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