Stability & Supervision | Finance Watch

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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2 PUBLICATIONS

Open letter

27/11/2014

Stability & Supervision

Bank reforms will help lift Europe’s struggling economy

Sir, The lobbying efforts against the EU’s proposal for structural reform of its largest banks are back to front (“Banks press Brussels to ditch reforms”, November 24).
Position paper

11/01/2013

Stability & Supervision

Finance Watch’s assessment of German High-Frequency Trading Act

In January 2013, Finance Watch was invited to give evidence at a public hearing on the proposal for an High-Frequency Trading Act (“Gesetzentwurf zur Vermeidung von Gefahren und Missbräuchen im Hochfrequenzhandel”) organised...

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The blog corner

Stability & Supervision

Level:Regular

12.09.2023

#NoMoreCrises: Unkept Promises of Reform

Stability & Supervision

Level:Regular

12.07.2023

Bank Capital is Good for the Economy

Stability & Supervision

Level:Regular

10.07.2023

8% – We had a deal!
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