15 The Operation of the Single Resolution Mechanism in the Context of the EU State Aid Regime

2016 ◽  
Author(s):  
Kokkoris Ioannis ◽  
Olivares-Caminal Rodrigo
Keyword(s):  
Crisis Management ◽  
Financial Stability ◽  
Banking Sector ◽  
Critical Appraisal ◽  
State Aid ◽  
Management Tool ◽  
Banking Union ◽  
The European Union ◽  
Single Resolution Mechanism ◽  
The Eu

This chapter addresses the initiatives of the European Commission to maintain the financial stability of the banking sector. It analyses the regulatory reforms on bank recovery and resolution introduced by the EU aimed at creating a Banking Union, and provides an overview of the Bank Recovery and Resolution Directive (BRRD) by taking into account the crisis management tool innovations. It also offers a critical appraisal of the Single Resolution Mechanism (SRM). The initiatives examined here are envisaged in a two-pronged approach: through the uniform rules of the Banking Union and in a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism (SRM) and a Single Resolution Fund (SRF) on one hand, and its interrelation with the state aid rules of the Treaty for the Functioning of the European Union (TFEU) on the other.

scholarly journals Deposit insurance systems in the European union: legal regulation and development prospects

2019 ◽  
pp. 156-162
Author(s):  
N. M. Alsov
Keyword(s):  
European Union ◽  
Financial Stability ◽  
Deposit Insurance ◽  
Banking Sector ◽  
Legal Regulation ◽  
Banking Union ◽  
The European Union ◽  
Insurance Policy ◽  
The Third ◽  
The Eu

The paper provides a historical, substantive and functional analysis of the legal regulation of deposit insurance systems (hereinafter referred to as DIS) in the European Union based on Directive 2014/49 / EC of the European Parliament and of the Council of April 16, 2014. “On Deposit Insurance Systems” (revised). The author considers the contribution of DIS to improving the financial stability of the EU banking sector. The paper shows a conducted assessment of the measures implemented and planned for implementation initiated by the European Commission and the European Central Bank for the implementation of a single European DIS as the third pillar of the Banking Union. The author concludes that the third Directive “On DIS” allows for a qualitative step forward towards the creation of the third pillar of the Banking Union. Despite some unresolved and controversial issues, it creates uniform rules of the game for national DIS in a deposit insurance policy. Further development and movement towards European DIS will make it possible to increase the effectiveness of the EU deposit insurance policy by reducing costs, overcoming administrative barriers in national DISs, increase the level of protection of depositors’ rights, and strengthen confidence in the banking sector and its stability.

scholarly journals Assessment of the European banking regulatory framework in light of its significance for the Republic of Serbia

Bankarstvo ◽  
2020 ◽  
Vol 49 (3) ◽  
pp. 77-101
Author(s):  
Kristijan Ristić ◽  
Aleksandar Živković
Keyword(s):  
European Union ◽  
Financial Markets ◽  
Financial Stability ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Debt Crisis ◽  
Regulatory Framework ◽  
Banking Union ◽  
The European Union ◽  
The Eu

The debt crisis in the European Union is known to be caused by the interdependence of banking and state financial stability, and, together with the non-existence of the fiscal union, it has taken on the existential dimensions of the EU project itself. Under the guise of financial fragmentation within the financial markets of the Eurozone, and from the aspect of the outbreak of the crisis, EU member states resorted to national interventions, thus closing national banking and financial markets, which ultimately resulted in deepened and stronger structural foundation of the crisis and its economic and financial consequences. In that context, the Banking Union is the regulatory and institutional response of the EU after the global financial crisis, about which the first proposals have found a place in institutional controversies since 2012. In addition to the key moment and motive for establishing such an institutional regulatory arrangement, the reason for its creation is more to create a union that is connected with the creation of a single market for financial services and free money circulation, and certainly with the tendency of fuller monetary integration. However, certain questions which arose remained relevant to date: whether these established and instrumentalized frameworks, mechanisms and procedures are in fact sufficient; whether the EU banking union, conceptually designed, really represents banking integration; and whether the "centralized-common" and "sovereign-national" relationships continued in the EU financial architecture, the use of the principle "one measure for all" in the implementation of the Basel III, non-inclusion of all types of banks, and the conflict of emission and supervisory roles of the Central Bank, be a structural conflict in achieving the desired financial stability, which is the ultimate goal. In the broader context of the functioning of the EU, financial stability can also be interpreted as a factor in the survival of the common currency and the European Union itself, regardless of the intertwined contradictions and construction conflict. In this paper, we analyze the functional scope of the regulatory framework for banking supervision in the EU during the five-year existence to date, and finally the effects and impact that this framework has had on the regulatory adjustment of the Serbian banking sector.

scholarly journals Comparative Analysis of Financial Stability Policy of The National Bank of Serbia and The European Central Bank

2015 ◽  
Vol 53 (2) ◽  
pp. 142-161
Author(s):  
Mirjana Jemović ◽  
Borko Krstić
Keyword(s):  
European Union ◽  
Financial Services ◽  
Financial Stability ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
System Stability ◽  
The European Union ◽  
National Bank ◽  
The Global Financial Crisis ◽  
The Eu

AbstractThe Republic of Serbia has successfully completed the first part in the European Union integration process, being granted candidate status for membership in the European Union (EU). The stage of accession negotiations is in progress, and it includes the full harmonization with the EU acquis, whereby the analytical review of legislation, the so-called screening is being carried out in 35 chapters. The global financial crisis that affected our country in 2008 has required a timely reaction of the National Bank of Serbia (NBS) in order to preserve the financial system stability, especially the banking sector as its most important segment. As the financial services sector adjusts within chapter 9, the aim of this paper is to assess the level of compliance of national legislation with the EU legislation regarding banking sector. Along with the regulatory initiatives in the field of preserving financial stability in the EU countries, the NBS has paid great attention to the harmonization of its financial stability policy with the financial stability policy of the European System of Central Banks (ESCB).

Competition Policy, Regulatory Architecture, and Public Intervention in the Crisis

2016 ◽  
Author(s):  
Xavier Vives
Keyword(s):  
United Kingdom ◽  
Competition Policy ◽  
Banking Sector ◽  
State Ownership ◽  
State Aid ◽  
Banking Union ◽  
The European Union ◽  
Public Intervention ◽  
The United Kingdom ◽  
Regulatory Architecture

This chapter examines the optimal design of the financial regulatory architecture and the relationship it should have with the competition policy authority. It first considers cases in the European Union and the developments since the adoption of banking union proposals, along with the reform in the United Kingdom since the 2007–2009 crisis. It then discusses public interventions in crisis and how competitive distortions of state aid and mergers induced by the crisis can be dealt with by competition policy. It also explores the consequences of state ownership and the performance of hybrid institutions such as savings banks as well as the state aid policy in the EU banking sector. The chapter goes on to assess the role of competition policy in addressing the too-big-to-fail (TBTF) problem before concluding with an analysis of the treatment of mergers in crisis situations, focusing on cases in Spain, the United Kingdom, and the United States.

scholarly journals Unia bankowa a stabilność systemu finansowego UE

2017 ◽  
pp. 75-88
Author(s):  
Małgorzata Mikita
Keyword(s):  
European Union ◽  
Financial Market ◽  
Financial System ◽  
Banking Union ◽  
The European Union ◽  
Single Supervisory Mechanism ◽  
Single Resolution Mechanism ◽  
The Stability ◽  
The Impact ◽  
The Eu

Banking union is a new concept of the European Union in the field of financial market. The project aim is to strengthen the financial system and increase its resistance to crises that may arise in the future. This article aims to analyse the impact of the banking union on the stability of the financial system in the EU. Three pillars of the banking union are taken into account: single supervisory mechanism, single resolution mechanism and single deposit guarantee scheme. The author argues that the banking union can contribute to the stability of the financial system in the EU, but it cannot guarantee it

scholarly journals European Deposit Insurance Scheme(s) – Consequences for the EU’s Financial Stability

2021 ◽  
Vol 24 (4) ◽  
pp. 123-136
Author(s):  
Klaudia Zielińska-Lont
Keyword(s):  
Financial Stability ◽  
Deposit Insurance ◽  
Banking Union ◽  
The European Union ◽  
Target Level ◽  
Insurance Scheme ◽  
National Implementation ◽  
Deposit Guarantee Schemes ◽  
Limited Scope ◽  
The Eu

The aim of this paper is to evaluate the potential consequences that the shortcomings in harmonising the national deposit guarantee schemes may have on the financial stability of the European Union. The relevance of this subject is underlined both by the European Commission’s intention to revive the European Deposit Insurance Scheme project in 2021 and the recent signals from Germany that they are willing to support the initiative. The paper presents a review of the discussions on establishing a European Deposit Insurance Scheme, the reasons for the project’s failure and the consensus solution that took the form of the Deposit Guarantee Scheme Directive (DGSD). The limited scope of deposit guarantee scheme harmonisation under this directive is discussed in the context of the related EBA opinions pointing to different areas of potential improvements. Differences in national implementation are also reviewed in terms of their potential impact on financial stability. Apart from a careful literature review, statistical analysis of the available financial information characterizing the largest national deposit schemes of the euro is performed to quantify their progress towards the target level of the available financial means. The results prove that most national schemes are still far from reaching the 0.8% target level of readily available funds and that potentially desirable amendments to the DGSD may drag them even further away from reaching that target by 2024. The author concludes that from the perspective of financial stability, the EU should focus on establishing a single scheme at an international level that would complete the project of establishing a banking union. The results contribute to the ongoing discussion on the need to further integrate the national deposit guarantee schemes inside the EU.

scholarly journals Competition Law and State Aid for Failing Banks in the EU and its Specific Implications for CEE Member States

2016 ◽  
Vol 9 (14) ◽  
pp. 145-157
Author(s):  
Virág Blazsek
Keyword(s):  
European Union ◽  
State Aid ◽  
Common Market ◽  
Competition Authority ◽  
The European Union ◽  
Member States ◽  
Positive Effects ◽  
The Stability ◽  
Bank Bailouts ◽  
The Eu

The bank bailouts following the global financial crisis of 2008 have been subject to prior approval of the European Commission (EC), the competition authority of the European Union. The EC was reluctant to reject rescue efforts directed at failing banks and so it consistently approved all such requests submitted by Member States. Out of the top twenty European banks, the EC authorized State aid to at least twelve entities. In this context, the paper outlines the gradually changing interpretation of EU State aid rules, the “temporary and extraordinary rules” introduced starting from late 2008, and the extension of the “no-State aid” category. The above shifts show that the EC itself deflected from relevant EU laws in order to systemically rescue important banks in Europe and restore their financial stability. The paper argues that bank bailouts and bank rescue packages by the State have led to different effects on market structures and consumer welfare in the Eurozone and non-Eurozone areas, mostly the Eastern segments of the European Union. As such, it is argued that they are inconsistent with the European common market. Although the EC tried to minimize the distortion of competition created as a result of the aforementioned case law primarily through the application of the principle of exceptionality and different compensation measures, these efforts have been at least partially unsuccessful. Massive State aid packages, the preferential treatment of the largest, or systemically important, banks through EU State aid mechanisms – almost none of which are Central and Eastern European (CEE) – may have led to the distortion of competition on the common market. That is so mainly because of the prioritization of the stability of the financial sector and the Euro. The paper argues that State aid for failing banks may have had important positive effects in the short run, such as the promotion of the stability of the banking system and the Euro. In the longrun however, it has contributed to the unprecedented sovereign indebtedness in Europe, and contributed to an increased economic and political instability of the EU, particularly in its most vulnerable CEE segment.

scholarly journals Pandemics, Climate and Public Finance

2020 ◽  
Author(s):  
Stefano Battiston ◽  
Monica Billio ◽  
Irene Monasterolo
Keyword(s):  
Financial Stability ◽  
The European Union ◽  
Short Term ◽  
Economic Resilience ◽  
Taxation Policy ◽  
Containment Measures ◽  
Socio Economic Impact ◽  
Business As Usual ◽  
The Eu

The outbreak of COVID-19 and the containment measures are having an unprecedented socio-economic impact in the European Union (EU) and elsewhere. The policies introduced so far in the EU countries promote a ‘business as usual’ economic recovery. This short-term strategy may jeopardise the mid-to-long-term sustainability and financial stability objectives. In contrast, strengthening the socio-economic resilience against future pandemics, as well as other shocks, calls for recovery measures that are fully aligned to the objectives of the EU Green Deal and of the EU corporate taxation policy. Tackling these long-term objectives is not more costly than funding the current short-term measures. Remarkably, it may be the only way to build resilience to future crises.

scholarly journals Multilevel cooperation in the EU resolution of cross-border bank groups: lessons from the non-euro area Member States joining the Single Resolution Mechanism (SRM)

2021 ◽  
Author(s):  
Agnieszka Smoleńska
Keyword(s):  
Euro Area ◽  
Banking Union ◽  
Member States ◽  
Essential Condition ◽  
European Banking Union ◽  
Cross Border ◽  
Single Resolution Mechanism ◽  
European Banking ◽  
Administrative Oversight ◽  
The Eu

AbstractCross-border banking presents a unique set of challenges in the EU from the perspective of arranging administrative oversight structures. Structuring cooperation between different EU and national authorities in a way which is conducive to trust-building and mutual engagement is an essential condition for overcoming disintegrative tendencies in the internal market. To assess how the existing EU arrangements fare in this regard in the context of EU resolution law, this article comparatively analyses the different models of multilevel administrative cooperation in the post-crisis EU framework. These are specifically the centralised model of the European Banking Union (Single Resolution Mechanism) and the relatively looser networked model of the resolution colleges. The multilevel cooperation under both models is nuanced given the distinct roles of the national resolution authorities, EU agencies and the differentiated status of non-euro area Member States in the EBU (Croatia, Bulgaria). The article’s findings allow to identify specific problems of constitutional nature pertaining to the accountability of administrative cooperation, equality of Member States and the implications of Meroni doctrine’s distortive effects.

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