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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3 PUBLICATIONS

Consultation response

Response to ESMA consultation on MiFID II/MiFIR Technical Standards

Consultation response

Finance Watch responses to the ESMA MiFID II/MiFIR Level 2 Consultation and Discussion Papers

Position paper

MiFID II position paper “Investing not betting”

Position paper “Investing not betting” on MiFID II, the EU’s revised Markets in Financial Instruments Directive. Press release 24 April 2012.

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