Sustainable Architecture for Finance in Europe (SAFE)
Refine
Year of publication
Document Type
- Working Paper (803)
- Part of Periodical (492)
- Report (62)
- Article (32)
- Contribution to a Periodical (2)
- Conference Proceeding (1)
- Review (1)
Has Fulltext
- yes (1393) (remove)
Is part of the Bibliography
- no (1393)
Keywords
- Financial Institutions (88)
- Capital Markets Union (65)
- ECB (60)
- Financial Markets (58)
- Banking Union (50)
- Banking Regulation (47)
- Household Finance (41)
- Banking Supervision (40)
- Macro Finance (40)
- Monetary Policy (35)
Institute
- Sustainable Architecture for Finance in Europe (SAFE) (1393)
- Wirtschaftswissenschaften (1341)
- Center for Financial Studies (CFS) (777)
- House of Finance (HoF) (684)
- Institute for Monetary and Financial Stability (IMFS) (123)
- Rechtswissenschaft (62)
- Foundation of Law and Finance (47)
- Institute for Law and Finance (ILF) (7)
- Gesellschaftswissenschaften (6)
- Frankfurt MathFinance Institute (FMFI) (3)
According to the Bank Recovery and Resolution Directive (BRRD), introduced as a lesson from the recent financial crisis, the losses a failing bank incurred should generally be borne by its investors. Before a minimum bail-in has occurred, government money can only be injected in emergency cas-es to remedy a serious disturbance in the economy and to preserve financial stability. This policy letter argues that in case of the Italian Bank Monte dei Paschi di Siena (MPS), which the Italian gov-ernment currently plans to bail out, a resolution would most likely not cause such a systemic event. A bailout contrary to the existing rules will lead to a mispricing of bank capital and retard the re-structuring of the European banking sector, the authors write. They appeal to the European Central Bank, the Systemic Risk Board and the EU Commission to follow the rules as the test-case MPS will have a direct impact on the credibility of the new BRRD regime and the responsible institutions.
Expectations on others
(2017)
Missed opportunity
(2017)