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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Evidence at EPP Group Hearing on ELTIFs

Finance Watch contribution to the hearing on European Long Term Investment Funds, European Parliament. By Frédéric Hache, Senior Policy Analyst, Finance Watch.

“Europe’s banking trilemma” – a report on Banking Union and bank structure reform

This report on Banking Union and bank reform in the EU, “Europe’s banking trilemma” [click to download], concludes that, despite its intention, Banking Union will fail to prevent European citizens from bearing the losses of failed banks in the event of a systemic banking crisis unless there are meaningful structural and capital reforms to Europe’s largest banks.
Consultation response

Finance Watch response to the Consultation on the review of the European System of Financial Supervision

Consultation response

Finance Watch response to EC Consultation on Banking Structure

Consultation response

Finance Watch response to the consultation on Long-term Financing

Consultation response

Finance Watch response to ECON coherence questionnaire

Position paper

Finance Watch’s General Assessement of CRD IV bill

In May 2013, we took the occasion of a hearing at the Bundestag on the application of the Capital Requirement Directive in Germany (Umsetzung der EU-Richtlinie über den Zugang zur Tätigkeit von Kreditinstituten und deren Beaufsichtigung sowie die EU-Verordnung über die Aufsichtsanforderungen an Kreditinstitute, Drucksache 17/10974, CRD IV-Umsetzungsgesetz) to make a general assessment of CRD IV – the application of Basel 3 recommendations in European law. 
Position paper

Position paper on German bank reform

Finance Watch position paper on German bill proposal to separate risks and to plan the recovery and resolution of credit institutions and financial groups (“Entwurf eines Gesetzes zur Abschirmung von Risiken und zur Planung der Sanierung und Abwicklung von Kreditinstituten und Finanzgruppen“).

The importance of being separated

(This publication also exists in French) Finance Watch policy note on the structural separation of retail/commercial banking activities from investment banking activities in the EU, “The importance of being separated – Making the public interest sovereign over banks”. Download the policy note (pdf, 16 pages) Press release (8 April 2013)

Report on the Bank Resolution and Recovery Proposal of the EC

Report on the EU’s Bank Recovery and Resolution proposals.
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