Policy portal Stability & supervision

When trust in the financial system disappears, panic sets in: fire sales of financial assets and bank runs can make the entire system collapse. Taxpayers are forced to bail out “too-big-to-fail” institutions to protect essential economic functions (deposits, credit, payment systems).

Mitigating implicit “moral hazard” requires sound prudential policies protecting essential banking services from excessive risk-taking and maintaining adequate capital levels to cover possible losses. Well-resourced, and independent supervision is also key. Finally, prudential regulation must also respond to new risks related to digitalisation (see “Digital Finance”) and climate change (see climate risk under “Sustainable Finance”).

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9 PUBLICATIONS

Position paper

Resilient banks, resilient economy

Joint statement

Joint Letter – Priorities on banking regulation, simplification and the assessment of the competitiveness of the EU banking sector

The European Commission is preparing a review of the EU banking rulebook. As calls grow to simplify financial regulation, a coalition of banks, civil society organisations and financial regulation experts warns that...
Cover image for a Finance Watch joint letter: a businessman in a suit with an orange umbrella, large white text about banking regulation priorities.
Position paper

Balancing investment growth and investor protection to support long-term innovation

How the revision of the European Venture Capital Regulation can help meet European strategic priorities
Consultation response

Finance Watch response to the Commission’s targeted consultation on the competitiveness of the EU banking sector

Report

Report – Systemic risk from shadow banking

Non-bank financial intermediaries (NBFIs) now account for more than half of global financial assets, but it is not just assets that have moved beyond banks. Risk has increasingly shifted to less visible...
Row of glass beakers with red tubing connecting them, containing blue, purple, and red liquids in a chemistry setup (lab scene)
Consultation response

Finance Watch response to the call for evidence on EU venture capital reforms

Consultation response

Finance Watch response to Commission call for evidence on competitiveness in the single banking market

The Commission’s review of competitiveness in the Single Banking Market should assess where changes to prudential rules improve banks’ ability to support productive investment and sustainable lending in the real economy. Simplification...
Consultation response

Improving supervisors’ assessment of bank risk management in Europe

Consultation response

Finance Watch response to the Commission Consultation on the implementation of the new market risk framework under Basel III standards

Speech

The false trade-off defining Germany’s CRD transposition (Bundestag Finance Committee hearing)

Debates on banking regulation are increasingly framed as a choice between competitiveness and prudential safeguards. Germany’s CRD transposition shows why this framing is misleading. The real tension is between bank profits and...

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