The fissures in banking markets have renewed interest in the EU’s regulatory approaches over the last few months. The EU is now finalising a banking package, the final notch of measures agreed upon after the financial crisis and as a part of this package has proposed upgrades to its crisis management and deposit insurance regime. Both are closely related to what are still matters of great concern, namely effective regulation. The banking package aims to strengthen banks’ capital, further consolidate the EU banking market and align the application of rules between home and host, close loopholes in the EU regulatory system, and harmonise prudential provisions. But the proposals have been met with a lot of resistance from banks and Member States. Trust between Member States still seems to be lacking to allow for a fully integrated banking system, and banks argue that capital levels are becoming too high – and too costly. The need to further strengthen the crisis management and deposit insurance framework was evident from the various bank liquidations that have happened over the last few years, and from the specific upheavals of the last few months. But the question that emerges is whether it is enough, and whether it will be respected by all parties in the case of a new bout of financial trouble. Moreover, deposit insurance systems still need to be further aligned, above all regarding the funding of the systems. All of this will, of course, take time.
This seminar will discuss the banking package in the context of the renewed concerns about efficient bank regulation.