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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24 PUBLICATIONS

Consultation response

Response to Commission consultation on the market risk prudential framework

Consultation response

Addressing challenges in the securitisation framework – Finance Watch response to Commission Consultation

Position paper

Can Securitisation Reboot the Capital Markets Union? The limits of recent policy proposals to ‘revive’ the market for asset-backed securities in Europe

Securitisation, which played a major role in the 2008-09 financial crisis, is being revisited as a potential tool to boost bank lending and deepen capital markets. Finance Watch’s latest position paper cautions...
Position paper

Introduction to Securitisation: Structures, regulation and market for asset-backed securities in the EU

As securitisation returns to the EU policy agenda, this position paper examines how it functions and its current role within the financial sector. This overview aims to provide a foundation for assessing...
Report

Report – Lost Momentum: The Evolution and Challenges of Basel III

Finance Watch examines the progress and challenges of the Basel III framework and addresses the looming risks to global financial stability. The report urges policymakers not to withdraw from international cooperation, but...
Open letter

Finance Watch Calls on ECON to Advance European Deposit Insurance Scheme (EDIS) and Protect Depositors

In a letter addressed to the Committee on Economic and Monetary Affairs (ECON), Finance Watch calls on European policymakers to proceed with preparations for the European Deposit Insurance Scheme (EDIS), which has...
Consultation response

Response to the European Commission’s consultation on State Aid for Banks in Difficulty

Policy brief

Policy brief: “Cracks in the pillars – Financial stability loses out in the EU’s Basel III endgame”

Finance Watch’s analysis of the Banking Package 2021 shows how it fails to do justice to the Basel III cycle of post-crisis reforms and continues to leave European banks insufficiently capitalised, and...
Consultation response

Improving the EU Macroprudential Framework for the Banking Sector (Consultation response)

Consultation response

Consultation response on the Review of the Crisis Management and Deposit Insurance framework (CMDI)

Consultation response

Response to EU Commission on review of Alternative Investment Fund Managers Directive (AIFMD)

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