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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6 PUBLICATIONS

Position paper

Resilient banks, resilient economy

Report

Report – Hidden risks in NBFI: Mapping vulnerabilities from shadow banking

Non-bank financial institutions (NBFIs) control over half of global financial assets, yet the term “non-bank” is misleading. This report introduces the structures and instruments that characterise the NBFI activity and shows that...
Position paper

Securitisation and capital requirements for European insurers – Part II

Balancing prudential treatment and policy objectives: why the proposed recalibration of Solvency II would increase risk
Consultation response

Finance Watch response to the European Commission call for feedback on Draft Solvency II Delegated Regulation

Position paper

Securitisation and capital requirements for European insurers

An introduction to securitisation in insurance and the prudential treatment of insurers’ securitisation investments
Consultation response

Response to Commission consultation on the market risk prudential framework

Consultation response

Finance Watch responds to Commission’s call for evidence – Communication on European Savings and Investments Union

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