Policy & regulation

Banking

We need a major overhaul of our banks and banking rules if we are to have a sustainable, stable financial system and economy.

Banks are at the heart of our financial systems and critical to the working of our economies. Today, however, some banks are disconnected from the needs of the economy and society, by focussing on financial trading. They are too-big-to-fail (TBTF) and risk being rescued with taxpayer money to protect its core functions: keeping deposits safe, providing credit, and maintaining the payment systems.

Finance Watch has some clear ideas on what needs to be done for the public interest to regain sovereignty over the banks: Implement a structural reform of banks (separation of credit from trading activities) (BSR) ; Increase the loss absorption capacity of banks through higher capital requirements (Basel III, CRD IV, MREL, TLAC); Improve the way how failing banks are restructured or resolved without having recourse to public funds (BRRD); Improve its risk management systems (NPL); Increase the size of deposit guarantee schemes (EDIS); Promote traditional banking as simple robust financing channels rather than the investment-banking model (CMU); Let the public participate in influencing the activities of banks and representing its own interests (RPIB)

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