The Banking Union is based on different components, partly on directives applicable throughout the EU, partly on two regulations applicable only in the euro states introducing the Single Supervisory Mechanism and the Single Resolution Mechanism.
These regulations are based on a comparable pattern, with centralisation of decisions at the European level, and involvement of authorities in the member states. However, also for legal reasons, the centralisation is much stronger for prudential supervision that for resolution. Issues of cooperation between the two Mechanisms, and between the European level and the national level reveal some interesting analogies but also differences. Coordination and cooperation will be necessary to avoid conflicts.
Fintech firms, once seen as “disruptors” of the traditional banking world, are now increasingly seen as attractive partners for established financial institutions. Such partnership agreements come in different forms and contexts, but most share...Read more
The moral hazard incentives of the bank safety net predict that distressed banks take on more risk and higher leverage. Since many factors reduce these incentives, including charter value, regulation, and managerial incentives, the net economic...Read more
The Covid-19 crisis in 2020 severely impacted the corporate and in turn, the financial sectors of the UK, entailing responses from financial regulators to implement unprecedented regulatory suspensions that affect both the financial sector and...Read more
We address a puzzle whereby lending marketplaces, aimed at directly connecting retail lenders and borrowers, retreat from auctions and take on the role of price setting and credit allocation, despite evidence that retail investors possess...Read more