5. Bank Supervision in Practice: The Case of the UK and of the European Banking Union

2018 ◽  
Author(s):  
Ross Cranston ◽  
Emilios Avgouleas ◽  
Kristin van Zweiten ◽  
Theodor van Sante ◽  
Christoper Hare
Keyword(s):  
Financial Services ◽  
Financial Stability ◽  
Debt Crisis ◽  
Banking Union ◽  
Financial Policy ◽  
Regulatory Structure ◽  
Bank Supervision ◽  
European Banking Union ◽  
European Banking ◽  
The Uk

This chapter discusses banking supervision in practice. It focuses on two jurisdictions: the UK and the European Banking Union (EBU), and considers in particular the type of powers enjoyed by the UK and EBU regulators, and the way they exercise them in their supervisory approaches. In the process the chapter highlights loopholes in the respective regimes and to some extent evaluates their effectiveness. On 1 April 2013 the Financial Services Act 2012 came into force, removing the Financial Services Authority and delivering a new regulatory structure for the UK, which comprises the Prudential Regulation Authority responsible for microprudential regulation and supervision of banks, building societies, and investment firms; and the Financial Conduct Authority, in addition to a financial stability (macroprudential) body within the Bank of England, the Financial Policy Committee. The EBU brought about the centralization of bank supervision and resolution within the Eurozone. The trigger for the establishment of the EBU was the Eurozone debt crisis.

scholarly journals The Asymmetric Implementation of the European Banking Union (EBU): Consequences for Financial Stability

2016 ◽  
Vol 50 (1) ◽  
pp. 7-26 ◽  
Author(s):  
Uwe Vollmer
Keyword(s):  
Financial Stability ◽  
Voting Rights ◽  
Banking Union ◽  
Member States ◽  
Bank Supervision ◽  
Eu Member States ◽  
European Banking Union ◽  
European Banking ◽  
Close Cooperation ◽  
European Stability Mechanism

Abstract EU Member States outside the Eurozone are hesitating to enter the European Banking Union (EBU) and to establish “close cooperation” in bank supervision with the ECB. This paper analyzes the consequences of such asymmetric integration for financial stability in Europe. It argues that the main obstacles against establishing close cooperation are a lack of voting rights and insufficient access to the fiscal backstop provided by the European Stability Mechanism (ESM). The paper presents arguments as to why international cooperation in bank supervision could be welfare improving, if multinational banks are dominant. It also discusses suitable reform options for making it more attractive for EU Member States to begin a close cooperation with the ECB.

European Banking Union

2017 ◽  
Author(s):  
Rachel A. Epstein
Keyword(s):  
Bank Lending ◽  
Banking Union ◽  
Bank Failures ◽  
Bank Supervision ◽  
European Banking Union ◽  
International Pressure ◽  
Banking Market ◽  
National Economic ◽  
European Banking ◽  
Communist Countries

If post-communist countries realized marketized bank–state ties through transition and international pressure to privatize their banks with foreign capital, western Eurozone states have more recently come under pressure to follow suit. European Banking Union centralized bank supervision and introduced a single resolution board at the expense of national authority. Thus under banking union, national regulatory and supervisory forbearance was curbed; barriers to banking market entry were no longer the purview of national authorities; disproportionate bank lending to one’s own sovereign would be discouraged; and bank bondholders, creditors and depositors—i.e. market actors—paid the price for bank failures first, before governments and taxpayers. While European Banking Union put the euro on stronger foundations, it also curbed national economic policy discretion and limited tools for adjustment. Taking Italy, Portugal, Spain and Germany as examples, this chapter explains why and in what policy areas Eurozone states’ sovereignty clashed with banking union.

scholarly journals The European Banking Union as a contributing factor to financial stability

2021 ◽  
Author(s):  
Κορνηλία Βικελίδου
Keyword(s):  
Financial Stability ◽  
Banking Union ◽  
European Banking Union ◽  
European Banking

Η Ευρωπαϊκή Τραπεζική Ένωση εμφανίστηκε ως απάντηση στην οικονομική κρίση που ξεκίνησε το 2007 στις ΗΠΑ και την επακόλουθη κρίση του δημόσιου χρέους στην Ευρωπαϊκή Ένωση, με σκοπό την αντιμετώπιση των αδυναμιών που προέκυψαν, προωθώντας τη χρηματοπιστωτική σταθερότητα σε Ευρωπαϊκό επίπεδο. Σε αυτό το πλαίσιο, η Τραπεζική Ένωση καθιέρωσε δύο πυλώνες και συγκεκριμένα τον Ενιαίο Μηχανισμό Εποπτείας το 2014 και τον Μηχανισμό Ενιαίας Εξυγίανσης το 2016, ενώ ο τρίτος πυλώνας, που αφορά ένα Ευρωπαϊκό Σύστημα Εγγύησης Τραπεζικών Καταθέσεων, βρίσκεται ακόμη υπό συζήτηση. Λαμβάνοντας υπόψη το νομικό καθεστώς και τις κατευθυντήριες γραμμές συντονισμού πολιτικής των εμπλεκόμενων θεσμικών οργάνων, που σχετίζονται με την Ευρωπαϊκή Τραπεζική Ένωση, αυτή η διδακτορική διατριβή εξετάζει καταρχάς κριτικά τη δομή διακυβέρνησης αυτών των τριών πυλώνων σε μια προσπάθεια να προσδιορίσει τη λειτουργία της Ευρωπαϊκής Τραπεζικής Ένωσης έως τον Νοέμβριο του 2020, καθώς και τα στοιχεία που λείπουν από αυτό το καθεστώς. Παρόλο που υπάρχει ευρεία βιβλιογραφία σχετικά με τους τρεις πυλώνες της Ευρωπαϊκής Τραπεζικής Ένωσης, δεν είναι ακόμη σαφές σε ποιο βαθμό μια Πολιτική Ένωση είναι απαραίτητη για την ολοκλήρωση αυτού του καθεστώτος, καθώς ο πιθανός αντίκτυπος στη χρηματοπιστωτική σταθερότητα. Σε αυτό το πλαίσιο, η ανάλυση της δομής της Τραπεζικής Ένωσης ακολουθείται από μια κριτική ανάλυση των πιο σημαντικών υποθέσεων εξυγίανσης τραπεζών μέχρι σήμερα και από μια πρωταρχική ερευνητική ανάλυση που προκύπτει από συνεντεύξεις με έξι εμπειρογνώμονες, εκ των οποίων ο καθένας εμπλέκεται σε διαφορετικές πτυχές του καθεστώτος της Τραπεζικής Ένωσης. Σε αυτό το πλαίσιο, αυτό το ερευνητικό έργο στοχεύει περαιτέρω στο να αποδείξει το κύριο επιχείρημα αυτής της διδακτορικής διατριβής, το οποίο συνεπάγεται ότι μια Πολιτική Ένωση θα συμβάλει θετικά στην ολοκλήρωση του έργου της Ευρωπαϊκής Τραπεζικής Ένωσης, και κατά συνέπεια στην προώθηση της χρηματοπιστωτικής σταθερότητας σε Ευρωπαϊκό επίπεδο. Αυτό θα μπορούσε να υλοποιηθεί με τη μείωση των εμποδίων στην οικονομική ολοκλήρωση, τα οποία σύμφωνα με τις συνημμένες συνεντεύξεις, έχουν αποδειχθεί ότι έχουν πολιτική προέλευση. Η φύση αυτής της προέλευσης διαφαίνεται μέσα από την τάση να προσαρμόζεται με πολιτικές παρεμβάσεις η εφαρμογή της σχετικής νομοθεσίας για την Τραπεζική Ένωση σε ρυθμίσεις, που λαμβάνουν χώρα στο όνομα της εθνικής χρηματοπιστωτικής σταθερότητας πλην όμως με ενδεχόμενη ζημία της μακροπρόθεσμης χρηματοοικονομικής ευρωστίας σε ευρωπαϊκό επίπεδο. Σε αυτό το πνεύμα, οι συνημμένες συνεντεύξεις αυτής της διατριβής ανέδειξαν τον πολιτικό χαρακτήρα των αδυναμιών και των κενών του ακόμη μη ολοκληρωμένου πλαισίου της Τραπεζικής Ένωσης, επιβεβαιώνοντας έτσι σε μεγάλο βαθμό τα συμπεράσματα αυτής της διδακτορικής διατριβής σχετικά με τη σημασία της ευρύτερης πολιτικής σύγκλισης στην καθιέρωση της απαιτούμενης εποπτείας, στις αναγκαίες μεταρρυθμίσεις, στη διαφάνεια, στην εμπιστοσύνη, καθώς και σωστή κατανομή του κόστους αποτυχίας των τραπεζών, που συνολικά θεωρούνται ουσιώδεις παράγοντες για την αποτελεσματικότητα του καθεστώτος της Τραπεζικής Ένωσης με γνώμονα την προώθηση της χρηματοπιστωτικής σταθερότητας σε Ευρωπαϊκό επίπεδο.

Legal and Conduct Risk in the Financial Markets

2018 ◽  
Author(s):  
McCormick Roger ◽  
Stears Chris
Keyword(s):  
Financial Markets ◽  
Financial Services ◽  
Financial Stability ◽  
Current Approach ◽  
Fiduciary Duty ◽  
Regulatory Change ◽  
Regulatory Structure ◽  
Legal Risk ◽  
The Uk ◽  
Libor Manipulation

This third edition on legal risk has been expanded to include much new material specifically on conduct risk. It has been updated to take into account developments in the law and professional standards concerning such risks and associated values in the context of the financial markets. Significant (and in some cases, endemic) conduct-related scandals, such as the widespread mis-selling of financial products and LIBOR manipulation, exposed by the financial crisis, have resulted in legal and regulatory change in equal measure (and profound effect) to that of the prudential and financial stability concerns captured in the second edition. Consequently this new edition fully examines the current approach to trust, ethics, and conduct within the broader framework of reputational and legal risk. In doing so, it clarifies what constitutes legal risk in contemporary financial markets and how to manage it, drawing on examples and case studies. Other developments in areas such as the resolution/insolvency of banks, the revision of the UK regulatory structure from the Financial Services Authority to the Financial Conduct Authority and Prudential Regulation Authority, and the recently made new crime of reckless management of a bank are all considered in full. There is also discussion of trends in areas ripe for development such as fiduciary duty amongst financial markets participants.

Part I Regulatory Structure, 3 European Financial Services

2018 ◽  
Author(s):  
Walker George ◽  
Purves Robert ◽  
Blair Michael
Keyword(s):  
Financial Services ◽  
Primary Sources ◽  
Banking Union ◽  
The European Union ◽  
Regulatory Structure ◽  
European Court ◽  
Treaty Of Rome ◽  
The Uk ◽  
Council Of Ministers ◽  
The Eu

This chapter examines the evolution of the European Union' financial services law and its impact on the development of financial services law in the UK, as it stands at the end of 2016, six months after the EU referendum. It first describes the evolving role and functions of the EU institutions, namely: the Council of Ministers, the European Commission, the European Court of Justice, and the European Parliament. It then considers the primary sources of EU law, including treaties, and the effects of the various changes in the Treaty of Rome. It also discusses the establishment of the single market in financial services and the moves to establish a banking union. Finally, it analyses the substantive financial services measures that have been adopted in the EU since the 1970s.

scholarly journals The European Banking Union: will it be Sufficient to Avert Another Debt Crisis in Europe?

2016 ◽  
Vol 6 (11) ◽  
pp. 15 ◽  
Author(s):  
Ross Alexander Spence
Keyword(s):  
Financial Crises ◽  
Debt Crisis ◽  
Banking Union ◽  
Member States ◽  
Single Supervisory Mechanism ◽  
European Banking Union ◽  
The Past ◽  
Single Resolution Mechanism ◽  
European Banking ◽  
Single Rulebook

<p>The rationales for the creation of the European Banking Union (“EBU”), what its objectives are and the main pillars of support for such a scheme, are worthy of investigation.  This article means to critically discuss the various elements of the EBU and determine whether the Single Supervisory Mechanism and the Single Resolution Mechanism, the main pillars underpinning the structure, are robust enough to avert another debt crisis in Europe. At the EBU’s heart lies the Single Rulebook (“SR”), which aims to counter the risk of fragmentation and nationalist tendencies. This inward looking trend became apparent in the recent financial crises, and contributed greatly to them. In an effort to avoid repeating the divisive and disjointed mistakes of the past, the SR is instead looking to provide unity and harmonisation across all participating member states. </p>

scholarly journals European Banking Union: the Impact on Financial Stability

2018 ◽  
Vol 18 (4) ◽  
pp. 123-135
Author(s):  
Cornelia Sahling ◽  
◽  
Nikolai Gusakov
Keyword(s):  
Financial Stability ◽  
Banking Union ◽  
European Banking Union ◽  
European Banking ◽  
The Impact

Deposit Protection and Bank Resolution

2015 ◽  
Author(s):  
Kleftouri Nikoletta
Keyword(s):  
Financial Stability ◽  
Deposit Insurance ◽  
Global Financial Crisis ◽  
International Standards ◽  
Banking Union ◽  
European Banking Union ◽  
Bank Resolution ◽  
Protection Systems ◽  
The Uk ◽  
The Impact

The 2007–08 global financial crisis proved that the interests of bank depositors are inadequately protected. Although a vast expansion in deposit protection systems around the world followed, our understanding of the impact of those systems and their interaction with bank resolution is still in its infancy. The focus of bank resolution studies has been on the largest systemically important banks, which have wholesale creditors who would be bailed in, leaving retail depositors untouched. However, many banks rely mostly on deposits for financing, and the number of banks of this form is expected to increase. This book aims to explain and provide current material analysis of deposit protection and bank resolution regimes. The analysis is based on an examination of the traditional rationales for creating deposit insurance and bank resolution, and a specific study of the UK, EU, and US legal frameworks. It aims to offer an analysis of this topic and to cover all relevant regulations, from its origins to its most recent developments, in a systematic and thorough way. It approaches the much-desired objective of financial stability from a different angle: that of depositor protection. This book comprises ten chapters, analysing: the rationales for creating a deposit protection system; the limitations of deposit protection systems; the European deposit insurance framework; the European banking union; recent cases on deposit guarantee schemes; international standards on deposit insurance; the UK deposit insurance framework; international and European regulatory developments on bank resolution; the UK Special Resolution Regime; and the US paradigm.

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