scholarly journals European Stability Mechanism Sebagai Upaya Uni Eropa Menangani Krisis Finansial Spanyol

2018 ◽  
Vol 5 (1) ◽  
pp. 15
Author(s):  
Nidya Rahmanita ◽  
Renny Miryanti
Keyword(s):  
Financial Crisis ◽  
Financial Stability ◽  
Structural Adjustment ◽  
Global Financial Crisis ◽  
Banking System ◽  
Financial Assistance ◽  
Bank Capital ◽  
The European Union ◽  
Member States ◽  
European Stability Mechanism

Global Financial Crisis has revealed major weakness in the design and implementation of the existing economic governance framework of the European Union. In addition, the first temporary fiscal backstop is EFSF (The European Financial Stability Facility) as a temporary crisis resolution mechanism by the Euro area Member States. In this case, The EFSF does not provide any further financial assistance, so the task of EFSF being replace by the new mechanism that includes the establishment of a permanent crisis management mechanism as the safeguard against imbalances in individual countries that is ESM (European Stability Mechanism). Spain as one of the Eurozone Member States that fall on financial crisis caused by disproportionate growth in the real estate sector, along with the expansion of credit, on 25 June 2012 made an official request for financial assistance through ESM for its banking system. In accordance with MoU, Spain must conduct a structural adjustment program through identifying individual bank capital needs, recapitalising and restructuring.

scholarly journals Dispersion of inflation expectations in the European Union during the global financial crisis

Equilibrium ◽  
2016 ◽  
Vol 11 (4) ◽  
pp. 737 ◽  
Author(s):  
Jan Acedański ◽  
Julia Włodarczyk
Keyword(s):  
European Union ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Inflation Expectations ◽  
The European Union ◽  
Member States ◽  
Inflation Rates ◽  
Initial Drop ◽  
The Global Financial Crisis ◽  
The Impact

Inflation expectations, both their median and dispersion, are of great importance to the effectiveness of monetary policy. The goal of this paper is to examine the impact of the global financial crisis on dispersion of inflation expectations in the European Union. Using European Commission’s survey data, we find that in the early phase of the crisis the dispersion dropped rapidly but then, after Lehman Brothers’ collapse, the trend reversed and these fluctuations cannot be explained by movements of inflation rates and other commonly used factors. We also observe that, in the new European Union member states, the initial drop of the dispersion was weaker whereas the subsequent rise was stronger as compared to the old member states.

scholarly journals Implications of the Global Financial Crisis on the Banking Sector in Eastern Europe and Baltic States

2011 ◽  
Author(s):  
Eva Banincova
Keyword(s):  
Financial Crisis ◽  
Financial Stability ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Bank Lending ◽  
Financial Supervision ◽  
Baltic States ◽  
Member States ◽  
Eu Member States ◽  
New Eu Member States

In 2008-09 the banking sectors of four Central and East European States and three Baltic States have experienced a large-scale financial crisis in the EU for the first time since becoming foreign-owned. Amongst the new EU member states Baltic States and Hungary were the worst affected economies. The paper first explores why the extent of crisis varied among these seven states by distinguishing major differences in the pre-crisis bank lending practices which reflect different macroeconomic developments and exchange rate policies in these states. Based on the analysis of bank performance indicators since 2008 and my interviews with representatives of major banks active in the region, the important role of foreign banks in mitigating the risks of financial contagion is outlined. The implication from the crisis is examined mainly from the perspective of the financial supervision and regulation in the enlarged EU. By inspecting the concrete experience of financial supervision authorities in the Baltic States the paper shows why the host country supervisors were not able to curb excessive lending and risk-taking by large Scandinavian banks. Since it is expected that the new EU regulatory and supervisory framework will reinforce the financial stability in the case of large cross-border banking groups, the paper addresses the issues in the financial crisis prevention, management are resolution in the new EU member states which will improve based on the new EU regulatory and supervisory framework for credit institutions.

scholarly journals Bank regulation and risk in Europe and Central Asia since the global financial crisis

2020 ◽  
Vol 10 (1) ◽  
pp. 75-93
Author(s):  
Deniz Anginer ◽  
Asli Demirgüç-Kunt ◽  
Davide Salvatore Mare
Keyword(s):  
Financial Crisis ◽  
Central Asia ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Bank Risk ◽  
Bank Capital ◽  
Regulatory Capital ◽  
Capital Ratios ◽  
Definition Of ◽  
The Global Financial Crisis

This paper examines changes in bank capital and capital regulations since the global financial crisis, in the Europe and Central Asia region. It shows that banks in Europe and Central Asia are better capitalized, as measured by regulatory capital ratios, than they were prior to the crisis. However, the increase in simple equity ratios for the same banks has been smaller over the past 10 years. The increases in regulatory capital ratios have coincided with a reduction in the stringency of the definition of Tier 1 capital and reduction in risk-weights. We further analyze the relationship between bank capital and bank risk using individual bank data. We show that bank risk in Europe and Central Asia is more sensitive to changes in simple leverage ratios than changes in regulatory capital ratios, consistent with the notion that equity ratios only include high-quality capital and do not rely on internal risk models to compute risk-weights. Although there has been some effort to increase capital and liquidity requirements for institutions deemed systemically important, the region has been lagging in addressing the resolution of these institutions. In line with Demirguc-Kunt, Detragiache, and Merrouche (2013), our findings show the importance of the definition of bank capital to assure bank financial stability in Europe and Central Asia.

scholarly journals The role of capital adequacy standards in creating financial safety of the bank: the evaluation and analysis of the survey results

2021 ◽  
Vol 20 (3) ◽  
pp. 641-657
Author(s):  
Irena Pyka ◽  
Aleksandra Nocoń ◽  
Mateusz Muszyński
Keyword(s):  
Financial Crisis ◽  
Commercial Banks ◽  
Global Financial Crisis ◽  
Banking System ◽  
Capital Adequacy ◽  
Bank Capital ◽  
Conducting Research ◽  
The Global Financial Crisis ◽  
Credit Institutions

Motivation: After the global financial crisis, banks’ financial safety has been considered as a public good and put under closer control and supervision. The prudential regulations of credit institutions which are the main subject of the study, have been significantly tightened. Although the minimum level of banks’ own funds, set adequately to the risk, had been a fundamental indicator of banks’ financial safety since the end of 1980s, after the global financial crisis the quality of this capital has changed and the scope of its regulation has been increased. By respecting the new prudential standards of the Basel Committee on Banking Supervision at the international level, financial safety of the banks has been additionally put under the macro-supervision. The concern about the overregulation of the banking system raises many controversies, what justifies conducting research on this subject. Aim: The main purpose of the article is to identify changes in the bank’s strategies of creating financial safety after the global financial crisis, considering macro- and micro-prudential regulations, aimed at strengthening the level and quality of bank capital, based on the results of the conducted research. Results: The results of the empirical research indicate that there is a strong belief among management staff in commercial banks in Poland that the increase in the level and structure of the own funds in credit institutions rises their financial safety. The results confirm the intensification of the process of implementing Basel regulations in commercial banks in Poland.

scholarly journals Global Financial Crisis – Policy Response

2014 ◽  
Vol 3 (1) ◽  
pp. 9-26 ◽  
Author(s):  
Milojica Dakić
Keyword(s):  
Financial Crisis ◽  
Financial Stability ◽  
Sovereign Debt ◽  
Global Financial Crisis ◽  
Strong Support ◽  
Theoretical Concept ◽  
The European Union ◽  
Eu Member States ◽  
The Usa ◽  
The Government

Abstract Six years after the outbreak of the financial crisis that had shaken the global financial system, experts and analysts all over the world continue discussing the effectiveness, scope and adequacy of mechanisms and measures implemented in the meantime, as well as the adequacy of the underlying theoretical concept. A global consent has been reached on ensuring financial stability through the interaction of monetary, fiscal and prudential policy to ensure the necessary macroprudential dimension of regulatory and supervisory frameworks. The USA crisis spilled over to Europe. Strong support of governments to bail out banks quickly resulted in sovereign debt crises in some peripheral EU Member States. Fiscal insolvency of these countries strongly shook the EU and increased doubts in the monetary union survival. The European Union stood united to defend the euro and responded strongly with a new complex and comprehensive financial stability framework. This supranational framework is a counterpart to the global financial stability framework created by the G20 member countries. Starting from the specific features of the monetary policy whose capacities are determined by euroisation, available instruments and resources for preventive supervisory activities, as well as the role of the government in crisis management, Montenegro created a framework for maintaining financial stability and prescribed fostering and maintaining financial stability as the main objective of the Central Bank of Montenegro.

scholarly journals THE ROLE OF INTEGRATED ISLAMIC COMMERCIAL AND SOCIAL FINANCE FOR CURBING CREDIT CYCLES AND ACHIEVING MACROPRUDENTIAL OBJECTIVE

2018 ◽  
Vol 3 (2) ◽  
pp. 139-180
Author(s):  
Arif Widodo
Keyword(s):  
Financial Crisis ◽  
Financial Stability ◽  
Risk Sharing ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Markov Switching ◽  
Banking System ◽  
Islamic Finance ◽  
Credit Cycles ◽  
Credit Cycle

It is widely believed that Islamic finance is inherently stable since the principle of risk-sharing and linking the financial to real counterpart in particular through its social finance are applied, hence the financial stability may successfully be attained. If mimicking the conventional finance, Islamic model will probably be facing instability, following the financial cycle. There has been a growing literature discussing credit cycle in mainstream perspective since 2008 global financial crash. However, it is quite rare to find study, in macro context, on credit cycles and the effectiveness of integrated Islamic commercial and social finance in achieving macroprudential objective: curtailing excessive credit. This study is designed to empirically examine the characteristics of cycles stemming from conventional and Islamic credit whether both have similar trend and also to investigate how the integrated Islamic commercial and social finance may be effective to hamper such cycles. By employing Hodrick-Presscot Filter, Markov Switching and Vector Error Correction Model, this study demonstrates that, in terms of cycle, Islamic model cycle has certain similarities with conventional counterpart since it functions under similar financial environment despite the fact that Islamic has less amplitude compared with conventional credit. Both credit and financing cycles tend to grow rapidly (excessive) several months before global financial crisis happened in 2008. This means that, in a dual banking system, credit and financing boom may precede financial crisis. Moreover, it is apparent also that the integrated Islamic finance is proven to be effective in curbing credit growth due to the effectiveness of both macroprudential instrument applied in banking sector and social finance in safeguarding financial stability. Keywords:  Credit cycle, Macroprudential policy, Markov Switching, HP filter JEL Classification: E32, E51, G29

Financial Assistance to Euro Area Members (EFSF and ESM)

2020 ◽  
Author(s):  
Ulrich Forsthoff ◽  
Jasper Aerts
Keyword(s):  
European Union ◽  
Euro Area ◽  
Financial Stability ◽  
Financial Assistance ◽  
Financial Instruments ◽  
The European Union ◽  
Short Overview ◽  
European Stability Mechanism

This chapter sets out the operational rules, financial instruments, and financial assistance documentation of the European Stability Mechanism (ESM) and the European Financial Stability Facility (EFSF) in the context of granting stability support within the European Union (EU). Following a short overview of the governance of the ESM and the EFSF when granting financial assistance, the scope and functioning of the financial instruments of the ESM are described in more detail as well as the contractual documentation governing the relation between the ESM and the beneficiary ESM Member. This chapter concludes with an overview of the EFSF/ESM country cases.

scholarly journals STRATEGIC MANAGEMENT OF TRANSNATIONAL BANKS IN THE INTERNATIONAL MARKET AFTER THE GLOBAL FINANCIAL CRISIS

2018 ◽  
Vol 4 (1) ◽  
pp. 131-147
Author(s):  
Dmytro Tsyhaniuk ◽  
Vita Boychenko
Keyword(s):  
Financial Crisis ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Banking System ◽  
Transmission Mechanism ◽  
Banking Systems ◽  
Doing Business ◽  
Crisis Recovery ◽  
Ease Of Doing Business ◽  
The Global Financial Crisis

The article identifies post-crisis determinants of strategic management of transnational banks in the market of direct investments by means of the correlation analysis of the dependence of growth of external assets of transnational banks of European countries on the indicators of profitability and financial stability of banking systems of the countries of placement of subsidiary banks, the efficiency of the transmission mechanism of monetary policy in these countries, the structure of a complex financial crisis and the speed of post-crisis recovery of the country, ease of doing business. There is no obvious connection between the presence of foreign banks in the banking system and indicators of profitability, ease of doing business and financial stability of banking systems. This is confirmed by the correlation analysis of 45 indicators on the example of 26 European countries for 2009–2011 (the period immediately after the end of the global financial crisis of 2008–2009). It is proved that in the post-crisis period, for transnational banks, the decision of increasing/decreasing the volume of assets in the banking system of the host country is dominated by: 1) the structure of a complex financial crisis; 2) the speed of post-crisis recovery of economies and banking systems of these countries; 3) the effectiveness of the transmission mechanism of monetary policy in these countries

scholarly journals Tug of War over Financial Assistance: Which Way Forward for Eurozone Stability Mechanisms?

2021 ◽  
Vol 9 (2) ◽  
pp. 173-184
Author(s):  
Moritz Rehm
Keyword(s):  
Moral Hazard ◽  
Financial Stability ◽  
Banking Sector ◽  
Limited Liability ◽  
Cost Benefit ◽  
Constant Factor ◽  
Financial Assistance ◽  
Burden Sharing ◽  
Member States ◽  
European Stability Mechanism

This article analyses the development of financial assistance in the Eurozone since 2010. It argues that reforms to instruments and bodies, notably the European Financial Stability Facility, the European Stability Mechanism, and the current Covid-19 recovery fund, are best explained by a re-occurring pattern of negotiations between potential creditors and debtors based on common Eurozone interests and national cost-benefit considerations. Building on a liberal intergovernmentalist approach, this article shows how this pattern influenced the step-by-step reform of financial assistance in the Eurozone. The threat to Eurozone stability served as a constant factor encouraging member states to expand and deepen the assistance formula. Creditors’ cost-benefit considerations were key for retaining disincentives, a limited liability for common debt, and intermediary borrowing and lending within the financing design. However, on the back of common Eurozone interests, debtors were able to push for an increase in assistance, an expansion of assistance into areas of banking sector support, and a softening of moral hazard elements in the more recent Covid-19 pandemic. Due to creditors’ continuous insistence on safeguards and limited burden-sharing, reform outcomes were repeatedly unable to resolve the difficulties at hand.

The European Union Financial Crisis: A Critical Analysis

2021 ◽  
Author(s):  
Caner Bakir ◽  
Mehmet Kerem Coban ◽  
Sinan Akgunay
Keyword(s):  
European Union ◽  
Financial Crisis ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Debt Crisis ◽  
The United States ◽  
Policy Coordination ◽  
Institutional Setting ◽  
The European Union ◽  
Institutional Reforms

The Global Financial Crisis, which originated in the United States, developed into a sovereign debt crisis in Europe, particularly the Eurozone. The Eurozone crisis was driven mainly by divergence in macroeconomic structures, fiscal indiscipline, and financial integration with fragmented regulatory and supervisory governance arrangements. The crisis also exposed flaws in the institutional design of the Economic and Monetary Union (EMU). The EMU lacked mechanisms of effective crisis prevention and management and fiscal coordination, had a centralized monetary policy despite divergence in the macroeconomic structure and institutional setting across member states, and adopted a “light touch” approach to financial regulation. In response, crisis-hit countries implemented structural reforms and public spending cuts. European Union (EU) leaders attempted to address these deficiencies with institutional reforms at the national and regional level. Policy responses and institutional reforms have led to populist backlash with declining trust in regional and domestic politics and organizations, with voters favoring more inward-looking, nationalist political parties. Within this context, the Eurozone and EU face further challenges to maintain macroeconomic and financial stability and to ensure intraregional policy coordination.

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