Policy portal Stability & Supervision

When trust in the financial system disappears, panic sets in: fire sales of financial assets and bank runs can make the entire system collapse. Taxpayers are forced to bail out “too-big-to-fail” institutions to protect essential economic functions (deposits, credit, payment systems).

Mitigating implicit “moral hazard” requires sound prudential policies protecting essential banking services from excessive risk-taking and maintaining adequate capital levels to cover possible losses. Well-resourced, and independent supervision is also key. Finally, prudential regulation must also respond to new risks related to digitalisation (see “Digital Finance”) and climate change (see climate risk under “Sustainable Finance”).

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6 PUBLICATIONS

Consultation response

Consultation response on the Review of the Crisis Management and Deposit Insurance framework (CMDI)

Position paper

Three reforms to strengthen the Banking Union and the euro area

As a complement to a hearing held on 7 November 2019 by MEP Pedro Marques as rapporteur for the Banking Union Annual Report, Finance Watch published a technical brief on the financial architecture of the Euro Area.
Speech

Public hearing at ECON on the banking legislation package

Finance Watch Senior Policy Analyst Christian Stiefmüller spoke on a panel at the European Parliament’s ECON Committee Public Hearing “Updating CRR, CRD, BRRD and SRMR: the new banking legislation package” on 25 April 2017.
Factsheet

Cheat sheet: What is Banking Union (SRM and SSM)?

Background; Actions of Finance Watch; Key risks; and our Publications on this dossier.
Policy brief

Finance Watch Policy Brief “Should precautionary recapitalisations make taxpayers nervous?”

This policy note looks at what could happen if the ECB’s comprehensive assessment reveals capital shortfalls at banks that cannot then raise funds on the market.
Position paper

Finance Watch note “Too-big-to-fail in the EU”

Finance Watch has published a note (pdf, 12 pages – this note also exists in German and in French) that 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, in light of three major questions:

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