The last five years have witnessed a huge redesign in the regulation of financial markets in Europe, culminating in the transfer of supervision of the largest banks in the eurozone to the European Central Bank (ECB). The regulatory agenda was largely set at the international level in the context of the G-20, while the supervisory change was a specifically European response to shortcomings at the national level. This raises the question: What next?
The start of the ECB as supervisor will coincide with the coming into office of a new European Commission, and before that a new European Parliament. As the EU and the world move out of crisis mode, it is likely that the Commission will be asked by the Parliament to set a more long-term agenda for Europe’s financial markets.
With the agreement on bank resolution and recovery Directive (BRRD), and the expected compromises on the single resolution mechanism (SRM) and the deposit guarantee scheme (DGS), full banking union comes in sight. Not every element will apply immediately, however, and long transition periods apply, raising issues for the interim period. In addition, there will be a lack of clarity concerning who is in charge, the ECB or the member states, which will create confusion and stir up turf battles for some time to come.
CEPS proposed to form a Task Force to explore these different issues in an in-depth and systematic way to produce a series of policy recommendations, focusing on the implications for EU banking, supervision and European integration. Members of the Task Force will discuss these matters in a methodical manner over three meetings in the coming six-to-nine months.
Chairman: José-María Roldán, former Director General of the Bank of Spain and former Chair of the Committee of European Banking Supervisors (CEBS)
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Click here to download the Task Force report: ECB Banking Supervision and Beyond
Prospectus (incl. Registration Form)