The spectacular collapse of Wirecard AG should serve as a wake-up call for the European Union on the need to pool the relevant supervisory mandates at EU level.
This study identifies the national insolvency procedures applicable to banks and analyses key differences between them, notably concerning the circumstances according to which the application if reorganisation or winding-up procedures is triggered, the ranking of liabilities, and the available tools to manage bank crises.
Despite progress in recent years towards a single banking policy framework in the euro area – a banking union – much of the German banking system has remained partly sheltered from uniform rules and disciplines that now apply to nearly all the area’s other banks. The resulting differences in regulatory regimes could generate vulnerabilities in the still-incomplete banking union, which is being tested in the context of the COVID-19 pandemic.
The new Fed rule is a material breach of Basel III, a new development as the US had hitherto been the accord’s main champion. This action undermines the global order without being ostensibly justified by narrower considerations of US national interest.
The banking system is critical to society and requires attention and support. In doing so, however, tough love is preferable to complacency.
In fighting anti-money laundering, the European Commission should act fast toward creating a central supervisory authority.
It will take more than the vote on December 12 to make the continent pay attention to the UK. Viewed from the continent, the UK election is one more episode in a Brexit series that “jumped the shark” long ago.