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Policy Contribution

A realistic bridge towards European banking union

New obstacles to the European banking union have emerged over the last year, but a successful transition remains both necessary and possible. The key next step will be in the second half of 2014, when the European Central Bank (ECB) will gain supervisory authority over most of Europe’s banking system.

By: Date: June 26, 2013 European Macroeconomics & GovernanceFinance & Financial Regulation Tags & Topics

New obstacles to the European banking union have emerged over the last year, but a successful transition remains both necessary and possible. The key next step will be in the second half of 2014, when the European Central Bank (ECB) will gain supervisory authority over most of Europe’s banking system.

This needs to be preceded by a rigorous balance sheet assessment that is likely to trigger significant bank restructuring, for which preparation has barely started. It will be much more significant than current discussions about a bank resolution directive and bank recapitalisation by the European Stability Mechanism (ESM).

The 2014 handover, and a subsequent change in the European treaties that will establish the robust legal basis needed for a sustainable banking union, together define the policy sequence as a bridge that can allow Europe to cross the choppy waters that separate it from a steady-state banking policy framework.

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Policy Contribution

coverEuropean Parliament

Total assets versus risk weighted assets: does it matter for MREL?

As a consequence of the global financial crisis, various initiatives have been taken in different jurisdictions to ensure the future resolvability of banks without massive use of public funds. In Europe, the BRRD introduced the concept of MREL, which is in the process of being defined.

By: Bennet Berger, Pia Hüttl and Silvia Merler Topic: European Parliament, Finance & Financial Regulation Date: August 9, 2016
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Silvia Merler

Italy’s bail-in headache

Weakness in the Italian banking sector is a major concern for the euro area. Retail investors stand to lose out if BRRD bail-in rules are strictly applied, and many in Italy are seeking an exception for political reasons. However, Silvia Merler argues that this would set a dangerous precedent. She calls for an orderly bail-in, followed by compensation for investors mis-sold unsuitable products.

By: Silvia Merler Topic: Finance & Financial Regulation Date: July 19, 2016
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MariaDemertzis1 bw

Companies' continue to respond to the ECB's corporate sector purchase programme

After a sharp increase in corporate bond issuance following the ECB’s announcement in March this year, corporates continue to respond to the Corporate Sector Purchase Program.

By: Maria Demertzis Topic: Finance & Financial Regulation Date: July 14, 2016
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Losing “EU passport” would damage City of London

If the UK cannot secure a “Norway” deal and stay within the internal market, the UK will lose the passporting rights which make London attractive as a financial centre. The macroeconomic fall-out from Brexit has also damaged the performance of banks and insurers.

By: Dirk Schoenmaker Topic: Finance & Financial Regulation Date: June 28, 2016
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Policy Contribution

screenshot-bruegel.org 2016-06-23 15-45-59European Parliament

The effectiveness of the European Central Bank’s Asset Purchase Programme

Since the end of 2014, inflation has been at or very close to zero. With very little ability to move the actual interest rate further into negative territory, the ECB has resorted to unconventional measures. The latest of these includes a programme to purchase corporate bonds, which started on 8 June 2016.

By: Maria Demertzis and Guntram B. Wolff Topic: European Macroeconomics & Governance, European Parliament, Parliamentary Testimonies Date: June 23, 2016
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MariaDemertzis1 bw

Corporates are responding to the new ECB corporate sector purchase programme

We have observed a sharp increase in corporate bond issuance following the ECB’s announcement in March this year, but it is too early to see the effects on investment by non-financial corporations.

By: Maria Demertzis Topic: European Macroeconomics & Governance Date: June 16, 2016
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Past Event

Past Event

European banking supervision: the first eighteen months

After its first 18 months, how has the SSM affected the European banking system?

Speakers: Mario Nava, Dirk Schoenmaker, Nicolas Véron, Pieter Verheugd and Guntram B. Wolff Topic: Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 14, 2016
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MariaDemertzis1 bw

Are central bank(er)s still credible?

Both the Fed and the ECB have managed to remain credible since the financial crisis, but their credibility levels have evolved differently. Since inflation in the US and the euro area has been similar in the past 8 years, the difference in the way that credibility has evolved is the result of the different macroeconomic policy mix applied.

By: Maria Demertzis and Nicola Viegi Topic: European Macroeconomics & Governance Date: June 14, 2016
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Past Event

Past Event

The Spanish financial crisis: Lessons for the European banking union

Spain is among the countries still recovering from the financial crisis. While misjudged investments were part of the cause, these past mistakes could offer lessons for the European banking union.

Speakers: Miguel Otero-Iglesias, Federico Steinberg, Pia Hüttl and Stefano Neri Topic: Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 9, 2016
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Alvaro Leandro

The use of ECB liquidity

The Eurosystem’s regular open market operations consist of one-week liquidity-providing operations (MROs), and three-month liquidity-providing operations (LTROs). We have updated data on the use of these operations by country.

By: Alvaro Leandro Topic: European Macroeconomics & Governance Date: June 9, 2016
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Nicolas Véron

European banking supervision: compelling start, lingering challenges

The new European banking supervision system is broadly effective and, in line with the claim often made by its leading officials, tough and fair, but there are significant areas for future improvement.

By: Dirk Schoenmaker and Nicolas Véron Topic: Finance & Financial Regulation Date: June 8, 2016
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Blueprint

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European banking supervision: the first eighteen months

The Blueprint provides a review of the first 18 months of European banking supervision. It reviews the overall situation and the situation in a number of euro-area countries. It provides important insights into the start of a new policy regime that involves profound change for the European banking landscape

By: Dirk Schoenmaker and Nicolas Véron Topic: Finance & Financial Regulation Date: June 8, 2016
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