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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Consultation response

Finance Watch response to ECON coherence questionnaire


Cheat sheet: What is UCITS V?

UCITS stands for Undertakings for Collective Investment in Transferable Securities, a popular category of regulated investment vehicle that accounts for around 85% of all European investment fund assets. UCITS are popular as they provide a European-wide standard for cross-border sales of investment products with a certain level of consumer protection.

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