A game changer: The EU banking recovery and resolution directive

Thomas Huertas, María J Nieto, 19 September 2013

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To end moral hazard and “too big to fail”, investors, not taxpayers, should bear the loss associated with bank failures. Recently, ECOFIN took a major step in this direction. It agreed a common position with respect to the Banking Recovery and Resolution Directive. If confirmed in the trialogue with the Commission and the European Parliament, the Directive will:

Topics: Financial markets
Tags: banks, moral hazard, Too big to fail

How much capital should banks have?

Lev Ratnovski, 28 July 2013

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There is an active debate on how much capital banks should have. Yet establishing an 'optimal' level of bank capital is more art than science. Any conclusion is model-specific and contains a degree of judgement. The purpose of this column is to contribute to the debate by offering one more benchmark.

Topics: Financial markets
Tags: banks, BASEL III, capital ratios

Supranational supervision: How much and for whom?

Thorsten Beck, Wolf Wagner, 20 July 2013

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The question of how to regulate and supervise banks across countries has taken the centre stage in the debate on the reform of the banking sector. The failure of internationally active financial institutions, such as Lehman Brothers, and cross-border banks, such as Fortis, Dexia or the Icelandic banks, played a prominent role during the Global Crisis.

Topics: International finance
Tags: banks, regulatory cooperation, supranational regulation

Everything the IMF wanted to know about financial regulation and wasn’t afraid to ask

Sheila Bair, 9 June 2013

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I was honoured when the IMF asked me to moderate the Financial Regulation panel at this year’s Rethinking Macro II conference. And while naturally, I delivered one of the more enlightening and thought-provoking policy discussions of the conference, I did fail in my duties as moderator to make sure my panellists covered all the excellent questions our sponsors submitted to us.

Topics: Financial markets
Tags: banks, capital ratios, financial regulation

New challenges for bank competition policy

Lev Ratnovski, 2 June 2013

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Bank competition policy has been a focus of much research and policy debate. The reason for this is the special nature of banks. In the non-financial sector, competition policy mainly focuses on efficiency (competitive pricing). Yet for banks there is another relevant dimension: systemic risk.

Topics: Competition policy, Global crisis, International finance
Tags: banking, banks, Basel, Competition policy

Hair of the dog that bit us: New and improved capital requirements threaten to perpetuate megabank access to a taxpayer put

Edward J Kane, 30 January 2013

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This column is a lead commentary in the VoxEU Debate "Banking reform: Do we know what has to be done?"

Topics: International finance
Tags: banks, Finance, financial regulation, global crisis, taxpayers, Too big to fail

Let’s get time and space back into finance

Biagio Bossone, 22 January 2013

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This column is a lead commentary in the VoxEU Debate "Banking reform: Do we know what has to be done?"

Topics: Financial markets
Tags: Banking reform, banks, global crisis

Implementation of Basel III in the US will bring back the regulatory arbitrage problems under Basel I

Takeo Hoshi, 23 December 2012

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This column is a lead commentary in the VoxEU Debate "Banking reform: Do we know what has to be done?"

Topics: International finance
Tags: banks, Basel, Dodd-Frank, Finance, regulation

The implicit subsidy of banks

Joseph Noss, Rhiannon Sowerbutts, 17 June 2012

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The experience of the crisis has revealed that a credible threat of failure does not always exist for banks. While equity holdings were severely diluted through state intervention, debt holders of some failed banks did not incur losses and were guaranteed by governments. To the extent that neither banks nor their creditors paid for this guarantee, it can be considered an implicit subsidy.

Topics: Financial markets
Tags: banks, implicit subsidy, UK

The impact of corporate governance in financial institutions

Hamid Mehran, Alan Morrison, Joel Shapiro, 6 April 2012

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Topics: Financial markets
Tags: banks, corporate governance, too-big-to-fail

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