Banking Union’s impact on financial stability – holistic approach

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Prudential supervision of credit institutions in the European Union has for a long time been the responsibility of national bodies, even though this did not match the international character of the activities of many supervised banks. After the establishment of the banking union’s Single Supervisory Mechanism this has changed particularly for systemically important credit institutions, that now fall under the direct, coordinated supervision under the auspice of the European Central Bank.
There was a great deal of speculation around what changes the banking union would bring to the financial sector in Europe, yet the net impact of the Single Supervisory Mechanism on financial stability and competitive position of the supervised credit institutions remains largely unknown. This monograph presents a holistic analysis of the impact that the reform of the EU’s financial safety net had on the banking sector. To make such evaluation possible, a dedicated synthetic indicator was designed to quantify the net impact of harmonized prudential supervision on the stability of credit institutions. The results signal that the establishment of the Single Supervisory Mechanism was a success and that the proposed synthetic indicator can serve as an early warning tool for authorities tasked with safeguarding financial stability.

Rok wydania2021
Liczba stron134
KategoriaPublikacje darmowe
WydawcaWydawnictwo Uniwersytetu Łódzkiego
Numer wydania1
Język publikacjiangielski
Informacja o sprzedawcyePWN sp. z o.o.

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Spis treści

  List of Acronyms    9
  Introduction    11
  Chapter 1. Financial stability and its safeguards    15
  1.1. The definition of financial (in)stability in the literature    16
  1.2. The financial safety net    19
  1.3. Financial market supervision models    21
  1.4. Micro- and macro-supervision models    24
  1.5. Statutory and implied responsibilities of the central bank in terms of ensuring financial stability    26
  1.5.1. The central bank’s involvement in financial market supervision    27
  1.5.2. The central bank as a lender of last resort    30
  1.6. The Basel Committee on Banking Supervision    31
  Summary    36
  Chapter 2. Creating a single EU financial market    39
  2.1. Early steps towards financial market integration     40
  2.2. EU regulations harmonising the financial markets until 2008    44
  2.3. Early crisis response    51
  2.4. Long-term solution proposals    53
  2.5. Legislative changes – as of 2010    56
  Summary    60
  Chapter 3. The European Banking Union    63
  3.1. The genesis of the banking union    64
  3.2. The Single Supervisory Mechanism    66
  3.3. The Single Resolution Mechanism    72
  3.4. The European Deposit Insurance Scheme    79
  Summary    83
  Chapter 4. The impact of the banking union on the banking sector    85
  4.1. Comparing research on the banking sector with the proposed method    85
  4.2. Characteristics of the indicators selected for the study    88
  4.2.1. Profitability indicators    90
  4.2.2. Risk exposure indicators    92
  4.2.3. Liquidity indicators    93
  4.3. Constructing the synthetic indicator    94
  4.4. The construction stages of the synthetic indicator    97
  4.5. Study results    104
  Summary    107
  Conclusion    109
  References    111
  List of tables    131
  List of figures    133