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Working Paper

Reform of the European Union financial supervisory and regulatory architecture and its implications for Asia

This Working Paper reviews recent developments in the EU’s financial supervisory and regulatory architecture with a view to draw out lessons for regional financial regulatory architecture in Asia.

By: , and Date: November 17, 2016 Topic: Finance & Financial Regulation

European Union countries offer a unique experience of financial regulatory and supervisory integration, complementing various other European integration efforts following the second world war.

Financial regulatory and supervisory integration was a very slow process before 2008, despite significant cross-border integration especially of wholesale financial markets.However, the policy framework proved inadequate in the context of the major financial crisis in the EU starting in 2007, and especially in the euro area after 2010.

That crisis triggered major changes to European financial regulation and to the financial supervisory architecture, most prominently with the creation of three new European supervisory authorities in 2011 and the gradual establishment of European banking union starting in 2012.

The banking union is a major structural institutional change for the EU, arguably the most significant since the introduction of the euro. Even in its current highly incomplete form, and with no prospects for rapid completion, the banking union has improved financial supervision in the euro area and increased the euro area’s resilience.

Asian financial integration lags well behind Europe, and there is no comparable political and legal integration. Nevertheless, Asia can draw useful lessons from European experiences in multiple areas that include the harmonisation of the micro-prudential framework, proper macro-prudential structures, and participation in global financial authorities.

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External Publication

European Parliament

Sovereign Concentration Charges: A New Regime for Banks’ Sovereign Exposures

Europe’s banking union has been central to the resolution of the euro-area crisis. It has had an encouraging start but remains unfinished business. If it remains in its current halfway-house condition, it may eventually move backwards and fail. EU leaders should seize these opportunities

By: Nicolas Véron Topic: European Macroeconomics & Governance, European Parliament Date: November 17, 2017
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Podcast

Podcast

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Bruegel senior scholar Nicolas Véron speaks with Steven Maijoor, the chair of ESMA, about the future of the Capital Markets Union (CMU), and of the EU's financial supervisory architecture.

By: The Sound of Economics Topic: Finance & Financial Regulation Date: November 16, 2017
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External Publication

Central Asia—twenty-five years after the breakup of the USSR

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Policy Contribution

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The organisation of the European Supervisory Authorities (ESAs) is based on a sectoral approach with one ESA for each sector, with separate authorities for banking, insurance and securities and markets. But is this sectoral approach still valid? This Policy Contribution outlines a long-term vision for the supervisory architecture in the European Union.

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Policy Brief

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Two of the banking union’s pillars – common European supervision by the European Central Bank and common European resolution by the Single Resolution Fund – are up and running. But the third, common European deposit insurance, is still missing. The authors propose to design the EMF as part of a broader risk-sharing and market-discipline agenda.

By: André Sapir and Dirk Schoenmaker Topic: European Macroeconomics & Governance Date: October 30, 2017
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Policy Contribution

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The sequence of crisis and policy responses after mid-2007 was a gradual recognition of the unsustainability of the euro-area policy framework. The bank-sovereign vicious circle was first observed in 2009 and became widely acknowledged in the course of 2011 and early 2012. The most impactful initiative has been the initiation of a banking union in mid-2012, but this remains incomplete and needs strengthening.

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Past Event

Past Event

14th Asia Europe Economic Forum (AEEF)

The 14th Asia Europe Economic Forum will be held in Seoul on 20-21 September 2017.

Topic: Global Economics & Governance Location: Seoul, Korea Date: September 20, 2017
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Blog Post

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Opinion

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Opinion

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By: Alicia García-Herrero Topic: Global Economics & Governance Date: July 19, 2017
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