This new work provides timely analysis of the cross-border exercise of banking activity in the EU and its supervision, from the perspective of the 'home-host rule'. It examines the current system and the efficacy of recent reforms considering whether the centralisation of decision making and a more effective mutualisation of financing tools could increase the efficiency of the EU banking system and reduce the asymmetry of information between home and host authorities.0This book analyses how far recent reforms under the banking union regime have addressed these issues to ensure the integrity and stability of the European integration project. It utilises data to illustrate the cross border exposures between member states and how they influence home and host decision making. But it equally explores those areas that still remain within the national discretion such as non-performing loans, insolvency-liquidation of banks and deposit protection arrangements, to0mention a few.0The book analyses the main pillars of the banking union: the single supervisory mechanism (SSM); and the Single Resolution Mechanism (SRM) and the proposed European Deposit Insurance Scheme (EDIS); and the related tools designed to provide crisis management under the European Stability Mechanism (ESM). As such the work considers the impact of the Single Rulebook. In considering these pieces of regulation and mechanisms the book analyses how international standards and EU requirements undertake to divide responsibilities between the home and host state and the extent to which they align interests between the home and host and minimise potential conflicts of interests. In this analysis examples from a set of EU cross-border banks are used to illustrate the workings of home and host relationship between Member States and Third Countries, and the benefits of participating in centralisation of decision making and mutualisation of financing in resolution and depositor protection.0.

Cross-border banking, while having the potential for a more efficient financial sector, also creates potential challenges for bank supervisors and regulators. This volume discusses topics that include: the landscape of cross-border bank activity, the resulting competitive implications, emerging challenges for prudential regulation, and more. Cross-border banking, while having the potential for a more efficient financial sector, also creates potential challenges for bank supervisors and regulators. It requires cooperation by regulatory authorities across jurisdictions and a clear delineation of authority and responsibility. That delineation is typically not present and regulatory authorities often have significantly different incentives to respond when cross-border-active banks encounter difficulties. Most of these issues have only begun to be seriously evaluated. This volume, one of the first attempts to address these issues, brings together experts and regulators from different countries. The wide range of topics discussed include: the current landscape of cross-border bank activity, the resulting competitive implications, emerging challenges for prudential regulation, safety net concerns, failure resolution issues, and the potential future evolution of international banking.

European banking supervision, also known as the Single Supervisory Mechanism, is the first and arguably the main component of European banking union. In late 2014, the European Central Bank became the supervisor for the region's largest banking groups; the ECB also oversees the supervision by national authorities of smaller banks. This Blueprint is the first in-depth study of how this ground-breaking reform is working in practice. Despite teething troubles and occasional misjudgements, this assessment finds that overall European banking supervision has been effective, demanding and broadly fair, at least for the banks under the ECB's direct watch. Even so, achieving a truly single market in banking services will require more time, further supervisory initiatives and new Europe-wide regulatory and legislative steps.

The SDN elaborates the case for, and the design of, a banking union for the euro area. It discusses the benefits and costs of a banking union, presents a steady state view of the banking union, elaborates difficult transition issues, and briefly discusses broader EU issues. As such, it assesses current plans and provides advice. It is accompanied by three background technical notes that analyze in depth the various elements of the banking union: a single supervisory framework; a single resolution and common safety net; and urgent issues related to repair of weak banks in Europe.

This handbook presents a timely collection of original studies on relevant themes, policies and developments in European banking. The contributors analyse how the crisis years have had a long lasting impact on the structure of European banking and explore the regulatory architecture that has started to take form in their wake. Academic experts and senior policy makers have contributed to this volume, which is organized in five main parts. The first part presents an overview of European banking through the crisis and beyond. The second part analyses performance and innovation in EU banking markets. The third part discusses the key regulatory changes aimed at fostering financial stability. Part four looks at the relevance of cross-border banking and part five presents a detailed analysis of the main EU banking markets. This is a highly informative and carefully presented handbook, which provides thought-provoking insights into the past, present and future landscapes of European banking. It will appeal to a wide readership, from scholars and students, through to researchers, practitioners and policy-makers.

Global governance of international banks is breaking down after the Great Financial Crisis, as national regulators are withdrawing on their home turf. New evidence presented illustrates that the global systemically important banks underpin the global financial system. This book offers solutions for the effective governance of global banks.

Responding to lessons learned during the global financial crisis, the EU Directive on the Recovery and Resolution of Banks and Securities Firms (the BRRD) has substantially changed the legal framework for insolvency management of financial services institutions across Europe. As the legislative process has been completed with the adoption of the BRRD, and of Regulation No 806/2014 establishing the Single Resolution Mechanism, this book offers a unique insight into the new European framework for the resolution of banks in distress. The chapters in this volume take stock of what has been achieved and present an insightful analysis of both the technical framework and its impact on banking institutions and their counterparties in representative forms of banking activities, including retail and wholesale depositors, counterparties to financial directives, and the providers of relevant parts of the market infrastructure. Special attention is given to the international coordination of resolution. The book's focus is on resolution and its impact on the relationships between banks, customers, other market participants and market infrastructure, including the preventative requirements on recovery and resolution planning under the BRRD. The chapters bring together a wide range of perspectives by scholars, practitioners from regulatory authorities and other parts of the financial safety net, as well as from private practice, from many jurisdictions, and both legal and economic backgrounds. Arranged broadly in line with the structure of the BRRD, the book is a highly useful reference for practitioners, policy-makers, and academics alike.

This book reviews banking internationalization by considering the new paradigms of globalization. The author primarily analyses why and how banks internationalize through equity deals, and the effect of regulation and market integration on the formation of deals, which allows authorities to manage the banking structure. This is a unique work that describes the relevance of the ownership model and cultural features of the partners and the key factors that help in choosing the market in which the banks bring activities abroad. The book addresses market characteristics, and new scenarios that should impact banks’ internationalization strategies and ability to achieve success in deals that capture the attention of both researchers and practitioners.

This paper documents the features of a new database that focuses on changes in the intensity in the usage of several widely used prudential tools, taking into account both macro-prudential and micro-prudential objectives. The database coverage is broad, spanning 64 countries, and with quarterly data for the period 2000Q1 through 2014Q4. The five types of prudential instruments in the database are: capital buffers, interbank exposure limits, concentration limits, loan to value (LTV) ratio limits, and reserve requirements. A total of nine prudential tools are constructed since some useful further decompositions are presented, with capital buffers divided into four subindices: general capital requirements, real state credit specific capital buffers, consumer credit specific capital buffers, and other specific capital buffers; and with reserve requirements divided into two sub-indices: domestic currency capital requirements and foreign currency capital requirements. While general capital requirements have the most changes from the cross-country perspective, LTV ratio limits and reserve requirements have the largest number of tightening and loosening episodes. We also analyze the instruments’ usage in relation to the evolution of key variables such as credit, policy rates, and house prices, finding substantial differences in the patterns of loosening or tightening of instruments in relation to business and financial cycles.

In this innovative book a leading expert directly involved in the development and implementation of the framework compellingly demonstrates the necessity of removing differences in banking legislation across national borders within the Banking Union. The author analyses all the cases where the European Central Bank (ECB) is required to apply national legislation in accordance with the country of establishment of the credit institutions under its direct supervision within the Single Supervisory Mechanism (SSM). Drawing on the case law of the European Court of Justice concerning the transposition of EU Directives the book also develops an analytical methodology to assess the derivation of national legislation from EU law with application to several concrete cases. In an in-depth analysis of the complex legal environment in which the ECB, as prudential supervisory authority, has been operating, the author thoroughly answers the following questions: – What are the supervisory tasks and powers of the ECB in the micro and macroprudential spheres? – When is the ECB required to apply national legislation? – What are the 'direct' and the 'indirect' supervisory powers of the ECB vis-à-vis significant supervised entities? – What are the options and discretions available in EU law? – What are the most important prudential options the ECB has exercised for significant supervised entities? – What are the main legal obstacles to the establishment of a truly single supervisory jurisdiction within the Euroarea with actual fungibility of capital and liquidity for cross-border banking groups? The legal analysis in this book supports, with great authority, the demands for a leap forward in the full harmonisation of key prudential requirements within the Banking Union. Legal and banking practitioners, officials in national and European authorities, banking law scholars and policymakers will benefit enormously from the lessons it contains for the way forward of the Banking Union and, more generally, the future of the European Union itself.