Objectives of the session
There are no host supervisors anymore in the banking union area but the distinction between home and host authorities and the “national bias” still exists for banks operating across borders in the “Banking Union” under the remit of the Single Supervisory Mechanism. Indeed, national regulators still fear that capital and liquidity will be trapped in individual Member States if a pan European banking group fails. This perception is particularly acute in countries that are strongly dependent on foreign banks for the financing of their economies.
The objective of this session is to discuss first the costs and risks of not addressing ring fencing policies and therefore not breaking the complete standstill where the Banking Union has come. Then the panel will focus on the measures that would solve this home host dilemma whether they are taken at European legislative level or by European authorities (Single Supervisory Board, Single Resolution Board) or by transnational banking groups.
Points of discussion
- What would be the consequences of not addressing ring fencing policies on the resilience of the Eurozone to economic shocks, on financial stability and the profitability and competitiveness of banks in Europe?
- Which policy priorities could overcome ring fencing policies and the fragmentation of the EU banking sector? What are the pros and cons of relying on branches rather than subsidiaries to conduct business in other euro area countries? What are the conditions to consider transnational banking groups as integrated entities in the EU regulatory and supervisory practices and not as a collection of stand-alone banks?