Past Event

European banking supervision: the first eighteen months

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

Date: June 14, 2016, 12:30 pm Topic: Finance & Financial Regulation

summary

See below for video and event materials

While the report presented by Dirk Schoenmaker and Nicolas Véron contains very insightful analyses, covering both quantitative and qualitative aspects of the European banking landscape, their focus in the event was on the assessment of European banking supervision.

Their assessment was based on four criteria:

  • First of all, they found European banking supervision to be effective. For example, the organisation through Joint Supervisory Teams provides a clear line of command, and the system proved its ability by effectively managing banking aspects of the 2015 Greek crisis.
  • Secondly, they found banking supervision to be tough. ECB supervision is intrusive and there seems to be less capture by supervised banks, partially explained by the geographical distance to Frankfurt. It has also not shied away from imposing higher capital requirements under SREP. However, this positive conclusion holds mostly for large banks and less so for less significant banks.
  • Moreover, it seems to be broadly fair with no evidence for country-specific patterns, e.g. in SREP scores. However, they also point to the existence of heterogeneity of country-specific domestic systemic buffers, which are still set by national competent authorities.
  • Fourthly, they found efficiency still to be an area for improvement. Finally, despite many positive aspects so far they point out that European banking supervision still has not broken the bank-sovereign vicious loop and allows for geographical ring-fencing.

Comments on the report by Mario Nava, Director at DG FISMA at the European Commission, and Pieter Verheugd, Manager of Public and Government Affairs at ING, largely shared the overall positive analysis of European banking supervision so far. The latter added a perspective from a bank directly affected by European banking supervision and found the idea of Banking Union appealing and argues that specific issues still left to national competent authorities should be removed.

Several questions in the Q&A session were about the supervisory set-up, e.g. the need and scope for legal revision of supervision, the relationship between SSM and non-SSM countries, and ring-fencing.

As for the first, Dirk Schoenmaker argued that there is no big need for legal revision as banking supervision is about execution and the general set-up with the ECB having the final word contributes to the smooth functioning of supervision. Nicolas Véron added that SSM regulation was adopted by unanimity and cannot easily be revised.

On the second question Dirk Schoenmaker responded that it was a minor point due to the fact that there are only very few large non-euro area banks under SSM supervision and colleges with supervisors in other jurisdictions were in place.

Regarding the last point, he said ring-fencing might only be a short-term issue as banks might turn subsidiaries into branches, should geographical ring-fencing continue. Another question concerned supervision of significant institutions (SIs), which European banking supervision focuses on, and its impact on less significant institutions (LSIs). Nicolas Véron argued that supervision of SIs still remains to be one of the big challenges. For example, banks under institutional protection schemes could be considered as SIs on aggregate and should be supervised accordingly.

Event summary by Bennet Berger, Research Assistant

VIDEO RECORDING


Event materials

Presentation by Dirk Schoenmaker and Nicolas Véron

Schedule

Jun 14, 2016

12.30-13.00

Check-in and lunch

13.00-13.30

Presentation

Dirk Schoenmaker, Non-Resident fellow

Nicolas Véron, Senior Fellow

13.30-14.30

Panel discussion and audience Q+A

Chair: Guntram B. Wolff, Director

Mario Nava, Director, Horizontal policies, European Commission, DG FISMA

Dirk Schoenmaker, Non-Resident fellow

Pieter Verheugd, Manager Public & Government Affairs, ING

Nicolas Véron, Senior Fellow

14.30

End

Speakers

Mario Nava

Director, Horizontal policies, European Commission, DG FISMA

Dirk Schoenmaker

Non-Resident fellow

Nicolas Véron

Senior Fellow

Pieter Verheugd

Manager Public & Government Affairs, ING

Guntram B. Wolff

Director

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

[email protected]

Read about event More on this topic
 

Past Event

Past Event

Investment firepower for the recovery: a conversation with Philippe Donnet, CEO of Assicurazioni Generali

At this event the CEO of Assicurazioni Generali, Philippe Donnet will be in conversation with Guntram Wolff, Director of Bruegel.

Speakers: Philippe Donnet and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: July 8, 2021
Read about event More on this topic
 

Past Event

Past Event

Strengthening the weak links: future of supply chains

What new supply chains trends will we see in the post-pandemic era?

Speakers: Ebru Özdemir, André Sapir and Guntram B. Wolff Topic: Global Economics & Governance Date: July 7, 2021
Read about event
 

Past Event

Past Event

Ensuring competitiveness of low-carbon investments

At this event, speakers will introduce the core idea of commercialisation contracts, and then discuss key design elements. This includes whether contracts should be issued at the EU or national level, how competition for contracts should be organised, and which industries should be eligible for support.

Speakers: Natalia Fabra, Peter Handley, Ben McWilliams and Georg Zachmann Topic: Energy & Climate, European Macroeconomics & Governance Date: July 1, 2021
Read about event More on this topic
 

Past Event

Past Event

EU debt vs national debts: friends or foes?

The EU will become into a major issuer of safe assets in the coming years. How will this interact with the debt issuance of European sovereign debts?

Speakers: Grégory Claeys, Yves Jacob, Gert-Jan Koopman, Pablo de Ramón-Laca and Imène Rahmouni-Rousseau Topic: European Macroeconomics & Governance Date: June 29, 2021
Read about event More on this topic
 

Past Event

Past Event

How to spend it? A closer look at the recovery plans

In this event, participants will take a closer look at the recovery plans submitted by EU countries.

Speakers: Zsolt Darvas, Alex Patelis and Maarten Verwey Topic: European Macroeconomics & Governance Date: June 23, 2021
Read about event More on this topic
 

Past Event

Past Event

Conference on the Future of Europe: Vehicle for reform versus forum for reflection?

At this policy dialogue organised by the research project EU3D, panellists will discuss different options and what they may entail while revisiting the debates on the future of Europe at national and EU-level that have been conducted thus far and their patterns, including preliminary findings on national parliamentary debates.

Speakers: Sergio Fabbrini, John Erik Fossum, Magdalena Góra, Vivien Schmidt, Manfred Weber and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: June 16, 2021
Read about event More on this topic
 

Past Event

Past Event

The Recovery and Resilience Fund: Accelerating the digitalisation of the EU?

How can new EU funds financed by EU borrowing supplement national digital and green funding and EU funds available from the standard seven-year EU budget to accelerate digitalisation?

Speakers: Sam Blackie, Zsolt Darvas, Maria Teresa Fabregas Fernandez, J. Scott Marcus and Ben Wreschner Topic: European Macroeconomics & Governance Date: June 8, 2021
Read about event More on this topic
 

Past Event

Past Event

Women, Covid-19 & The EU Recovery Plan

How can we ensure that the recovery plan doesn’t leave women behind when 84% of working women in the EU aged 15-64 are employed by services that were predominantly impacted by Covid-19 restrictions?

Speakers: Mary Collins, Maria Demertzis, Alexandra Geese, Jacob Funk Kirkegaard, Dan Mobley, Naomi O'Leary and Emma Rainey Topic: European Macroeconomics & Governance Date: June 2, 2021
Read about event More on this topic
 

Past Event

Past Event

Paris Reinforce: From Numbers to Insights: How to think about economic-climate modelling

Join us for the presentation of ‘From Numbers to Insights: How to think about economic-climate modelling’.

Speakers: Haris Doukas, Ajay Gambhir, Glen Peters, Georg Zachmann and Ewelina Daniel Topic: Energy & Climate Date: May 26, 2021
Read about event More on this topic
 

Past Event

Past Event

The work of the future: How are new jobs created and what are the implications for labour markets?

Join us for a presentation of 'New Frontiers: The Origins and Content of New Work, 1940 — 2018' by David Autor (MIT and NBER) and the findings on the source of 'new work' followed by a discussion with an invited panel of academics and policy makers.

Speakers: David Autor, Maarten Goos, Barbara Kauffmann and Georgios Petropoulos Topic: Innovation & Competition Policy Date: May 25, 2021
Read about event
 

Past Event

Past Event

The Future of Work – a conversation with Commissioner Schmit

EU Commissioner for Jobs and Social Rights Nicolas Schmit joins Bruegel for a conversation around the future of work.

Speakers: Mario Mariniello and Nicolas Schmit Topic: European Macroeconomics & Governance, Innovation & Competition Policy Date: May 25, 2021
Read about event More on this topic
 

Past Event

Past Event

After COVID-19: a most wanted recovery

This event, jointly organised with ISPI, as the National Coordinator and Chair of the T20 Italy, is part of the T20 Spring Roundtables and it will focus on strategies for a swift and sustainable economic recovery for Europe.

Speakers: Franco Bruni, Maria Demertzis, Elena Flores, Paul De Grauwe, Christian Odendahl, Miguel Otero-Iglesias and André Sapir Topic: European Macroeconomics & Governance Date: May 19, 2021
Load more posts