CEPS © 2019

Ten years after EULEX Key principles for future EU flagship initiatives on the rule of law
Policy Contribution

Bank bonus compromise bodes ill for the Single Supervisory Mechanism

08 March 2013

Bank bonus compromise bodes ill for the Single Supervisory Mechanism

Download Publication

3335 Downloads

The European Parliament has probably won a Pyrrhic victory with its position on bank bonuses, argues CEPS CEO Karel Lannoo in this new Commentary. In return, EU member states got what they wanted with the new Capital Requirements Directive (CRD IV): no binding leverage ratio; mortgage risk weightings and capital add-ons to be determined by member states; and no obligatory consolidated capital position for bank-insurance companies. In other words, Banking Union will start out with capital rules that are more like Emmental cheese than a single rulebook. This is a huge encumbrance for a well-functioning Single Supervisory Mechanism (SSM), and makes a single resolution mechanism impossible.

Karel Lannoo is Chief Executive Officer and Senior Research Fellow at CEPS.


About the Author


Bank bonus compromise bodes ill for the Single Supervisory Mechanism
Download Publication

3335 Downloads