Risk and Regulation in Euro Area Banks

Since the last financial crisis, much work has been undertaken to strengthen the ability to respond to distress in the EU financial system. However, reforms enacted since the Single Resolution Mechanism was created in July 2014 as part of the Banking Union initiated in 2012 mainly focused on non-performing loans, and the third pillar of the Banking Union, namely a European Deposit Insurance Scheme, has not been completed.

Against this backdrop, this book focuses on the reasons why the EU banking system continues to remain fragile. In particular, high stocks of non-performing loans in some countries, the Level 3 assets evaluation and high exposure of many banks to the debts of their own governments are among the major concerns. Secondly, the book discusses the completion of the public safety net for banks, including deposit insurance, which remains primarily at the national level. This creates scope for contagion from banking sector fragility to national sovereign debt distress. Of interest to banking researchers, academics and students, this book combines rigorous analysis of the regulatory framework and empirical investigation on EU banking system data to prove that market discipline and risk sharing should be viewed as complementary pillars of the Euro-area financial architecture rather than as substitutes, requiring a reformed institutional framework.

Auteur

Francesca Arnaboldi is an Associate Professor in banking and finance at the University of Milan, Italy. She gained her BSc and MSc in Finance from Bocconi University, Italy, her MSc in Financial Management from the University of London, CeFiMS, UK and her PhD in Finance from the University of Bologna, Italy. Francesca has been working as a Visiting Researcher in the Centre for Banking Research at the Cass Business School, City University, London, UK since 2009 and she is a member of the Research Center on Financial Studies at University of Modena and Reggio Emilia, Italy. She has been a visiting researcher/associate member at several organisations including the School of Business and Economics, Loughborough University; Centro di ricerca coordinata sulle misure di prevenzione personali e patrimoniali, University of Milan; Alphonse and Dorimene Desjardins International Institute for Cooperatives, HEC Montreal; and the Stern School of Business, New York University. Francesca's research interests focus on international banking; corporate governance; bank competition and performance; financial innovation; bank regulation and supervision. Her research has been published in international peer-reviewed books and journals.

Contenu

1. The Euro Area Banking System: Where Do We Stand?.- 2. The Main Challenges Facing the Euro Area Banking System.- 3. Non-performing Loans in the Euro Area.- 4. Level 3 Assets and Sovereign Exposure.- 5. Progress on the First Two Pillars of the Banking Union.- 6. The Third Pillar of the Banking Union: The European Deposit Insurance Scheme.- 7. The European Deposit Insurance Scheme.