Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Micossi’

A fresh approach to complete the banking union in the Eurozone

Posted by hkarner - 16. Dezember 2017

Stefano Micossi 11 December 2017, vox.eu

Director General, ASSONIME; Honorary Professor College of Europe; Member of the Board of CEPS and of Cassa Depositi e Prestiti; Chairman of the School of European Political Economy, LUISS

Tackling legacy risks Den Rest des Beitrags lesen »

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State aid, bail-in, and systemic financial stability in the EU

Posted by hkarner - 7. Juni 2016

Stefano Micossi, Ginevra Bruzzone, Miriam Cassella 06 June 2016, voxeu

Stefano Micossi

Director General, ASSONIME; Professor, College of Europe; Member of the Board, CEPS, BNL – BNP Paribas, CIR Group and Cassa Depositi e Prestiti; Chairman, Scientific Council of the School of European Political Economy, LUISS

Deputy Director General, Assonime

 Senior legal officer, Competition and Regulation Unit, Assonim

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Banking crisis yet again and how to fix it

Posted by hkarner - 29. Februar 2016

Stefano Micossi 26 February 2016, voxxeu

Stefano Micossi

Director General of ASSONIME; Professor at the College of Europe; Member of the Board of CEPS, BNL – BNP Paribas and CIR Group; and Chairman of Scientific Council of the School of European Political Economy, LUISS

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Rebooting the Eurozone: Step 1 – Agreeing a Crisis narrative

Posted by hkarner - 19. November 2015

CEPR 85

Thu, 11/19/2015, voxeu

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Bail-in rules in EU banking union and financial stability

Posted by hkarner - 6. Juni 2014

Stefano Micossi (College d’Europe), 5 June 2014, voxeu

The pre-conditions and scope of burden-sharing by creditors under state aid control and resolution procedures do not coincide. Moreover, questions have been raised as to whether the guidelines on state aid to banks take sufficient account of systemic stability considerations when imposing the conversion or write-down of creditor claims.3

The analysis in this column concentrates on:

  • The mutual consistency of the two sets of rules; and
  • How they address the question of systemic stability when creditor claims are bailed-in in normal market conditions.4

The 2013 Banking Communication on state aid by the European Commission

Since 2008 the European Commission has adopted seven decisions under Articles 107-109 TFEU on the compatibility of state aid measures in favour of banks.5 To foster financial stability and minimise future resort to taxpayers’ resources, the July 2013 Commission Guidelines lay down some conditions. The restructuring plans must be sufficiently timely and decisive to restore the bank to long-term viability, or shut it down. State aid is to be authorised only after junior creditors have been involved in the burden-sharing.

The Communication envisages two scenarios for burden-sharing: Den Rest des Beitrags lesen »

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The new Single Bank Resolution Mechanism of the European Union

Posted by hkarner - 2. Dezember 2013

Stefano Micossi, 30 November 2013, voxeu

Of the three pillars of the nascent European banking union, establishing a unified bank-resolution mechanism is the most pressing issue. This column suggests some changes to the existing Single Resolution Mechanism proposals. The decision to initiate resolution should be left to the ECB and national resolution authorities. Debt automatically convertible into equity when capital thresholds are violated could partially replace liabilities subject to bail-in. The Single Bank Resolution Fund must be supranational to ensure the credibility of the mechanism.

A banking union in Europe is essential to the long-run stability of the Eurozone (Draghi 2013 ). It will be built on three pillars:

  • A single supervisory mechanism.

The necessary regulation for this is already in force.

  • A single resolution mechanism.

This is now under negotiation before the European Parliament and the Council, with a political compromise likely to be reached at the forthcoming European Council meeting in December.

  • Deposit insurance.

For the time being, European leaders have decided to proceed by stronger harmonisation of national legislation, rather than establishing a centralised European system. Den Rest des Beitrags lesen »

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A viable alternative to Basel III prudential rules

Posted by hkarner - 10. Juni 2013

Stefano Micossi, 9 June 2013, voxeuMicossi

Stefano Micossi is Director General of ASSONIME, a business association and think tank in Rome, as well as a member of CEPS Board of directors, Chairman of the Board of CIR Group, and Professor at the College of Europe.

Global banking regulation is undergoing a massive reform, known as Basel III. This column argues that the proposed reforms will fail to correct flaws in the old system. The new rules are even more complicated, opaque and open to manipulation. What is needed is a radical shift to prudential rule based on a straight capital ratio.

There is something surreal in the process for the implementation of the new Basel capital framework for banks in the EU and US. The new rules, known as Basel III, have the full support of financial officialdom (see BCBS 2013b for the latest official update by Basel Supervisors). Implementation is a different story. Implementation appears fraught with frictions and resistances, while the system is by now utterly discredited in the eyes of financial markets and academia (e.g. Dewatripont et al. 2010, Goodhart 2013, Admati and Hellwig 2013).

Radical criticism has been voiced also by top regulators (e.g. Hoenig 2013, Haldane and Madouros 2012, and Tarullo 2008 on Basel II). In recent research, I propose shifting to a prudential rule based on a straight capital ratio (Micossi 2013 ). My work also argues that the often-rehearsed arguments against this solution are plain wrong.

What’s wrong with Basel rules?

My main criticism concerns the continuing reliance – for the determination of capital requirements – on banks’ risk-weighted assets calculated with unwieldy probabilistic econometric models of dubious analytical foundation that leave ample room for gaming the system and, more importantly, that are by construction unable to deal with systemic shocks hitting the banking and financial system (IMF 2009, FSA 2010, Haldane 2011, Carmassi and Micossi 2012).

After ignoring the issue almost entirely during the negotiations leading to the Basel III Accord, Basel supervisors have awoken to the reality of wide divergences in risk-weighted asset ratios to total assets for individual banks and are studying the issue as part of their new Regulatory Consistency Assessment. Their January 2013 report finds that ample risk-weighted asset variations can only in part be explained by differences in business models and risk management techniques, and reflect to a considerable extent “elements of the flexibility provided to banks and supervisors within the Basel framework” (BCBS 2013). Similar exercises undertaken by the European Banking Authority have come to similar conclusions (EBA 2013). Den Rest des Beitrags lesen »

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