European countries have undertaken a large number of regulatory reforms or are in the process of doing so, ranging from higher capital and liquidity requirements for banks and a banking union for the eurozone to new regulatory frameworks for the insurance and investment fund sectors. We focus on the main regulatory reform programmes and proposals over the past five years. Many of these were initiated after the onset of the global financial crisis by the G20 and their implementation has progressed reasonably swiftly. These include the Basel III reforms of capital and liquidity requirements and the attempt to centralise trading of securities previously traded over-the-counter. On the other hand, there are reform proposals, which are politically controversial, both within and across countries, which have made only limited progress so far. Among these are activity restrictions on banks and suggestions for a security transaction tax. Most importantly, discussions on complementing the currency union in the eurozone with an effective banking union are still ongoing and there are critical decisions that still need to be taken. We argue that the evidence suggests that the agreed reforms and many of the proposed ones will have moderate effects on banks’ funding costs and thus real investment. The largest effects, including on market structure and corporate financing structures, are likely to come from the resolution of the eurozone crisis and the design of the banking union. Our main policy conclusion is therefore that priority should be given to completing the banking union’s unfinished parts so that it can operate effectively. This will go a long way to helping resolve the eurozone crisis. The banking union comprises a Single Supervisory Mechanism (SSM), a European deposit insurance system and a European Resolution Mechanism (ERM). The ultimate goal of the banking union appears to be the preservation of the Single Market in financial services and the avoidance of having to provide taxpayers’ money in support of distressed banks. None of the three pillars of the banking union have been formally approved to date. Negotiations and proposals are at an advanced stage for the creation of the SSM, and at an earlier stage concerning the ERM. No proposals are under discussion currently concerning the creation of a European deposit insurance system. We believe it is important that all three pillars be approved and implemented as soon as possible

Structural changes in European financial systems: the impact of the regulatory framework on investment in the European Union

CARLETTI, ELENA
2013

Abstract

European countries have undertaken a large number of regulatory reforms or are in the process of doing so, ranging from higher capital and liquidity requirements for banks and a banking union for the eurozone to new regulatory frameworks for the insurance and investment fund sectors. We focus on the main regulatory reform programmes and proposals over the past five years. Many of these were initiated after the onset of the global financial crisis by the G20 and their implementation has progressed reasonably swiftly. These include the Basel III reforms of capital and liquidity requirements and the attempt to centralise trading of securities previously traded over-the-counter. On the other hand, there are reform proposals, which are politically controversial, both within and across countries, which have made only limited progress so far. Among these are activity restrictions on banks and suggestions for a security transaction tax. Most importantly, discussions on complementing the currency union in the eurozone with an effective banking union are still ongoing and there are critical decisions that still need to be taken. We argue that the evidence suggests that the agreed reforms and many of the proposed ones will have moderate effects on banks’ funding costs and thus real investment. The largest effects, including on market structure and corporate financing structures, are likely to come from the resolution of the eurozone crisis and the design of the banking union. Our main policy conclusion is therefore that priority should be given to completing the banking union’s unfinished parts so that it can operate effectively. This will go a long way to helping resolve the eurozone crisis. The banking union comprises a Single Supervisory Mechanism (SSM), a European deposit insurance system and a European Resolution Mechanism (ERM). The ultimate goal of the banking union appears to be the preservation of the Single Market in financial services and the avoidance of having to provide taxpayers’ money in support of distressed banks. None of the three pillars of the banking union have been formally approved to date. Negotiations and proposals are at an advanced stage for the creation of the SSM, and at an earlier stage concerning the ERM. No proposals are under discussion currently concerning the creation of a European deposit insurance system. We believe it is important that all three pillars be approved and implemented as soon as possible
2013
9789286119163
Kolev, Atanas; Tanayama, Tanja; Wagenvoort, Rien
Investment and investment finance in Europe
Allen, Franklin; Beck, Thorsten; Carletti, Elena
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/3986765
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