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The whistle-blower as a private enforcement tool in the EU banking sector: call for clarity Journal of Banking Regulation Pub Date : 2024-03-13 Dimitrios Kafteranis
Following the financial crises and several scandals, the issue of whistleblowing has re-emerged for the banking and financial sector. These events led the EU to adopt provisions on whistleblowing in several EU legal acts concerning the banking sector such as in the Single Supervisory Mechanism. On October 2019, the EU adopted the Directive on the protection of persons who report breaches of Union law
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Assessment of macroprudential strategy documents: Are they ready for the challenges ahead? Journal of Banking Regulation Pub Date : 2024-03-13
Abstract Macroprudential policy is still a relatively new policy area (“more art than science”). Unlike monetary policy, it still does not have any tested and robust strategies to follow. Using a novel strategy index, we explore and critically review macroprudential strategy documents published in 30 countries in 2014–2023. The overall results point to fairly high quality of strategies, with low level
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Analysing decentralised autonomous organisations (DAOs): limits and perspective Journal of Banking Regulation Pub Date : 2024-03-09
Abstract Distributed Ledger Technologies enable the decentralised delivery of traditional financial services. They also allow the development of disruptive proposals, such as the issuance of stablecoins managed by the governance system of an autonomous decentralised organisation or DAO. One such project, MakerDAO, stands out in the current DeFi landscape. The initiative claims its proposal provides
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Risk-taking in banks: does skin-in-the-game really matter? Journal of Banking Regulation Pub Date : 2024-03-09
Abstract The belief that bank capital helps improve stability takes for granted the idea that increases in capital are an incentive to reduce risk-taking because bank owners would have more to lose (skin-in-the-game) if their banks fail. Nevertheless, given the higher cost of capital as compared to debt, it is also possible that increases in capital would lead to higher risk-taking due to the need
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The audit of banks in the USA: Has it changed since the financial crisis? Journal of Banking Regulation Pub Date : 2024-03-07 Paul Tanyi, Jack Cathey
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Legal implications of automated suspicious transaction monitoring: enhancing integrity of AI Journal of Banking Regulation Pub Date : 2024-02-06 Umut Turksen, Vladlena Benson, Bogdan Adamyk
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Macro-prudential regulations and systemic risk: the role of country-level governance indicators Journal of Banking Regulation Pub Date : 2023-12-11 Muhammad Suhail Rizwan, Anum Qureshi, Irfan Ullah Sahibzada
This paper empirically examines the moderating role of country-level governance indicators (CGIs) in the relationship between macro-prudential policy instruments (MPI) and systemic risk. Results from 68 countries, during the period 2000–2017, show that CGIs in terms of corruption controls, government effectiveness, regulatory quality, and rule of law play a negative moderating role in the MPI-systemic
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Why European banks adjust their dividend payouts? Journal of Banking Regulation Pub Date : 2023-11-08 Marco Belloni, Maciej Grodzicki, Mariusz Jarmuzek
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Credit risk of Vietnamese commercial banks: does capital structure matter? Journal of Banking Regulation Pub Date : 2023-11-03 Nam Pham Hai, Chi Le Ha Diem
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Heterogeneity of business models and banking sector resilience Journal of Banking Regulation Pub Date : 2023-10-31 Bernardo P. Marques, Carlos F. Alves
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How do board and ownership characteristics affect bank risk-taking? New evidence from sub-Saharan Africa Journal of Banking Regulation Pub Date : 2023-09-12 Douglas A. Adu
The study examines the impact of board attributes, ownership structures and other bank-specific factors on bank risk-taking. Using a sample of 220 banks in 16 sub-Saharan Africa countries for the years 2007–2018, the findings of the study are fourfold. First, the findings indicate that independent directors who are financial experts reduce bank risk-taking. Second, the study finds that the number of
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Gambling bank behaviour, incentive mechanism, and sanctions: A two-stage model Journal of Banking Regulation Pub Date : 2023-09-04 Isabel Strecker
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The effect of political institutions on the interplay between banking regulation and banks’ risk Journal of Banking Regulation Pub Date : 2023-08-26 Tiago M. Dutra, João C. A. Teixeira, José Carlos Dias
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Banking stability determinants: evidence from Portugal Journal of Banking Regulation Pub Date : 2023-08-24 Maria Teresa Medeiros Garcia, Simão Rodrigues Abreu
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Banking services and financial inclusion in India’s poorest regions Journal of Banking Regulation Pub Date : 2023-08-23 Indrajeet Kumar
Financial inclusion involves providing suitable products and services to meet transactional, payment, savings, credit, and insurance needs. While India has progressed in financial inclusion, challenges persist in low-income regions and among marginalised groups. This study assesses the National Strategy for Financial Inclusion (NSFI) 2019–2024 and its potential to address such challenges in Bihar,
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Assessing the determinants of banking stability in the MENA region: what role for economic and financial freedom? Journal of Banking Regulation Pub Date : 2023-07-15 Nesrine Djebali
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Financing the orderly transition to a low carbon economy in the EU: the regulatory framework for the banking channel Journal of Banking Regulation Pub Date : 2023-06-03 María J. Nieto, Chryssa Papathanassiou
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Merger as an only rescue/choice: lessons from a public sector bank of India Journal of Banking Regulation Pub Date : 2023-04-15 Gaganpreet Kaur, Anju Bala
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Crypto-asset activities and markets in the European Union: issues, challenges and considerations for regulation, supervision and oversight Journal of Banking Regulation Pub Date : 2023-04-06 Christoph Wronka
Crypto-assets are rapidly becoming a mainstream phenomenon in the global financial system. This is owing to developments in technology, an increase in token issuances and the existence of tens of thousands of old and emerging crypto-asset projects around the world. There is consensus that the financial sector stands to gain from crypto-assets, for example in terms of cost reductions, increased effectiveness
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Do institutions matter? Political economy of the enhancement of banking supervision Journal of Banking Regulation Pub Date : 2023-04-01 Sawa Omori
The aim of this study is to examine the degree to which a country’s institutional quality, such as the degree of central bank independence and the rule of law, matters for enhancing banking supervision. While numerous studies have examined the effects of central bank independence (CBI) on inflation and the quality of governance on economic growth and development, empirical studies exploring these institutional
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Household debt service ratio in a developing economy: borrower-based analytical tools and macroprudential policy overview in Kazakhstan Journal of Banking Regulation Pub Date : 2023-03-30 Zhandos Ybrayev, Andrey Talakin, Yerlan Kairullayev, Talgat Zharkynbay
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Issues when the parental and host country systemic institution buffers differ: the case of Czechia Journal of Banking Regulation Pub Date : 2023-01-16 Lukáš Pfeifer
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Supervisory forward guidance: the effectiveness of the 2020 euro area supervisory capital relief on the bank credit supply channel Journal of Banking Regulation Pub Date : 2022-12-26 Silviu Oprică, Claudia Schwarz
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The bail-in credibility: barking dogs seldom bite Journal of Banking Regulation Pub Date : 2022-12-03 Giulio Velliscig, Maurizio Polato, Josanco Floreani, Enrica Bolognesi
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Open APIs in banking and inclusive growth: an innovation to support the poverty eradication programs in India Journal of Banking Regulation Pub Date : 2022-09-21 Shailesh Rastogi, Akanksha Goel, Adesh Doifode
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Fundamental rights and banking supervision Journal of Banking Regulation Pub Date : 2022-08-02 Chryssa Papathanassiou
This paper examines the intersections of fundamental rights and European banking supervision. It contributes to a more nuanced and refined understanding of the importance of European Union (EU) fundamental rights for supervised banks in the absence of an EU-wide administrative code. Since 2014, the European Central Bank (ECB) has assumed prudential supervisory tasks for supervised entities. Fundamental
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Understanding the LIBOR scandal: the historical, the ethical, and the technological Journal of Banking Regulation Pub Date : 2022-07-30 Xing Huan, Gary John Previts, Antonio Parbonetti
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COVID-19: boon/disguise for Indian banks? Journal of Banking Regulation Pub Date : 2022-07-22 Anju Goswami
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The evolution of macroprudential policy use in Chile, Latin America and the OECD Journal of Banking Regulation Pub Date : 2022-06-24 Carlos Madeira
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Decoupling VaR and regulatory capital: an examination of practitioners’ experience of market risk regulation Journal of Banking Regulation Pub Date : 2022-06-03 Orla McCullagh, Mark Cummins, Sheila Killian
The central role of Value-at-Risk (VaR) within bank market risk regulation received significant criticism from financial media and government investigations into the events of the 2007–2009 financial crisis. Impending reform of bank market risk regulation under the Fundamental Review of the Trading Book (FRTB) demotes VaR, replacing it with a layered framework centred on expected shortfall (ES). However
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The impact of COVID-19 on digital-only banks: are they winners or losers? Journal of Banking Regulation Pub Date : 2022-06-03 Katarzyna Schmidt-Jessa
The main objective of this paper is to determine the impact of the COVID-19 pandemic on the operations of digital-only banks. In order to achieve the main objective, two methods have been used. The first method is a strategic analysis, and the second method is a financial analysis of the digital-only banks covering two periods, that is, before the emergence of the COVID-19 pandemic (2018–2019) and
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What do we know about the impact of income diversification on bank performance? A systematic literature review Journal of Banking Regulation Pub Date : 2022-05-30 Haykel Zouaoui, Faten Zoghlami
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The single supervisory mechanism and the European framework for the enforcement of competition law: a comparison between two models for economic governance in the EU Journal of Banking Regulation Pub Date : 2022-05-25 Filippo Annunziata, Mariateresa Maggiolino
This paper proposes to develop a parallel reading of the banking supervision system and the framework for the enforcement of competition law, with the purpose of setting out points of convergence and divergence between the two, analyzing their institutional architecture and various issues pertaining to the relevant, applicable law. This approach might prove fruitful for a better understanding of each
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The regulators’ dilemma and the global banking regulation: the case of the dual financial systems Journal of Banking Regulation Pub Date : 2022-05-03 Andrea Delle Foglie, Elias Boukrami, Gianfranco Vento, Ida Claudia Panetta
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The effects of supervisory stress testing on bank lending: examining large UK banks Journal of Banking Regulation Pub Date : 2022-04-15 Kasim Ahmed, Giovanni Calice
In this paper, we study the effects of supervisory stress test exercises on 19 UK banks over the 2005–2018 period. The novelty of our approach is that we include two stress testing timelines from two banking supervisory authorities. Using a difference-in-difference methodology, in a first step, we analyse the effects of the Bank of England’s stress tests on the lending behaviour of large UK banks.
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Reassessing bank monitoring models: an empirical analysis of the value of market signals in the period 2008–2020 Journal of Banking Regulation Pub Date : 2022-03-25 Tânia Costa, Júlio Lobão, Luís Pacheco
One of the major goals of bank supervisors is to predict bank distress events. As the environment changes, it is crucial to reassess and improve the models used in monitoring banks. The financial soundness of banks is traditionally assessed based on accounting ratios. However, the incorporation of market information in these models may significantly improve its ability to predict bank distress. The
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BOFIA 2020 and financial system stability in Nigeria: Implications for stakeholders in the African largest economy Journal of Banking Regulation Pub Date : 2022-02-26 Ibrahim Alley
This paper reviews the Banking and Other Financial Institutions Act (BOFIA) 2020 in Nigeria in the light of regulatory theories and extant empirical evidences, with a view to predicting its potential effects on financial system stability in Nigeria, domestic stakeholders and international investors. Our review shows that the new law attains a higher level of clarity in presentation of banking rules
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Bank regulation: Has the regulation pendulum swung too far? Journal of Banking Regulation Pub Date : 2022-02-25 David T. Llewellyn, Tim Congdon
Banking crises inevitably bring forth more and different regulation of banks, and the global crisis from mid-2007 to early 2009 was no exception as the aftermath of the crisis witnessed one of the biggest-ever upheavals in international banking regulation. The regulatory pendulum has had a long history, as bank regulation has varied in ambition and complexity over many decades. This article is intended
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Some implications of the new global digital economy for financial regulation and supervision Journal of Banking Regulation Pub Date : 2022-02-18 José Carlos Laguna de Paz
The digital economy is leading to substantial changes in the financial sector. Not surprisingly, it raises a number of sensitive legal issues. (1) New technologies and big data are expected to increase efficiency in the financial sector. But some limits need to be drawn in order to protect the fundamental rights at stake, such as privacy and non-discrimination. (2) The application of the so called
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Impact of IFRS 9 on the cost of funding of banks in Europe Journal of Banking Regulation Pub Date : 2022-01-30 Mahmoud Fatouh, Robert Bock, Jamal Ouenniche
On implementation, IFRS 9 increases credit loss (impairment) charges and reduces after-tax profits of banks. This makes retained earnings and hence capital resources lower than what they would be under IAS 39. To maintain their capital ratios under IFRS 9, banks may choose to hold higher levels of equity capital. This paper uses a modified version of CAPM, which accounts for the low-risk anomaly (as
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Consumer rights and banking contracts Journal of Banking Regulation Pub Date : 2022-01-23 Bagus, Philipp, Howden, David
Survey evidence regularly shows that bank customers view bankers as less ethical or honest than other professions. This article sheds light on one potential origin of these misgivings that has been until now unaddressed. The legal system endows certain rights to banks without altering the duties obliged of depositors. By categorizing rights according to their corresponding duties we show that a conflict
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A digital euro for everyone: Can the European System of Central Banks introduce general purpose CBDC as part of its economic mandate? Journal of Banking Regulation Pub Date : 2022-01-21 Mooij, A. M.
This paper discusses the introduction of a general-purpose Central Bank Digital Currency (CBDC) by the European Central Bank (ECB) that is directly accessible to consumers through national central banks (NCB). This paper finds that it is not possible to introduce such a system under the ECB’s monetary mandate. The aim of direct access is to promote the socio-economic inclusion of the unbanked. This
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Capital and asset quality implications for bank resilience and performance in the light of NPLs’ regulation: a focus on the Texas ratio Journal of Banking Regulation Pub Date : 2022-01-11 Velliscig, Giulio, Floreani, Josanco, Polato, Maurizio
Based on a sample of 63 listed European banks, this paper investigates the relationship of capital and asset quality, in terms of provisioning and coverage policies, with bank risk and performance during the period 2005Q1-2018Q4. Our results point out different relationships between risk-based and non-risk-based measures of capital with bank risk and performance profiles. In particular, the information
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Financial regulation in the age of the platform economy Journal of Banking Regulation Pub Date : 2021-12-30 Eichengreen, Barry
Platform businesses allow for collaboration with nontraditional partners and bring together different categories of customers, in the financial context savers and investors or lenders and borrowers, creating large, scalable networks of users. Their entry into finance promises potential benefits to consumers in the form of new products, lower prices, wider choice, and enhanced consumer experience. At
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The case for private administration of deposit guarantee schemes Journal of Banking Regulation Pub Date : 2021-12-30 Meyerhof Salama, Bruno, Braga, Vicente P.
We make the case that the responsibility for appointing board members in Deposit Guarantee Schemes (DGS) for commercial banks should be entrusted to the industry. In doing so, we challenge the position adopted by the International Monetary Fund, which has proposed public DGSs as the best practice. We lay out the comparative advantages of private over public DGS administration, and contend that the
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Built-in challenges within the supervisory architecture of the Eurozone Journal of Banking Regulation Pub Date : 2021-11-01 Philippas, Dionisis, Dragomirescu-Gaina, Catalin, Leontitsis, Alexandros, Papadamou, Stephanos
We analyse a sample of significant European financial intermediaries that fall under the Single Supervisory Mechanism, which is part of the existing institutional supervisory architecture of the Eurozone. Theory suggests that herding among financial intermediaries raises cross-sectional correlations and has negative implications for systemic risk. Empirically, herding behaviours are associated with
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Basel IV capital requirements and the performance of commercial banks in Africa Journal of Banking Regulation Pub Date : 2021-10-30 Oyetade, Damilola, Obalade, Adefemi A., Muzindutsi, Paul-Francois
Capital adequacy is considered an essential determinant banks' performance. Banks in Africa have revenue growth opportunities, but fragility and vulnerability to bank failures arising from capital inadequacy and non-performing loans affect their performances. The Basel Committee aims to introduce higher capital requirements is to strengthen the resilience of the banking system; however, the implementation
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Do financial reforms always improve banks efficiency and competition? A long-term analysis of Turkey’s experience Journal of Banking Regulation Pub Date : 2021-10-29 Altintas, Nuri, Ferrari, Alessandra, Girardone, Claudia
Financial policy changes are aimed at improving banks efficiency and competition; however, their effectiveness in the context of emerging economies is far from obvious. Using Turkey as a case study, we create a unique data set and analyse the impact of almost 30 years of financial policy changes on the cost efficiency and competitiveness of its banks. We estimate a stochastic cost frontier with inefficiency
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Addressing the challenges of post-pandemic debt management in the consumer and SME sectors: a proposal for the roles of UK financial regulators Journal of Banking Regulation Pub Date : 2021-10-26 Chiu, Iris H.-Y., Kokkinis, Andreas, Miglionico, Andrea
Regulatory actions for short-term debt-relief during the Covid-19 pandemic are facilitating a significant level of indebtedness. We argue that regulators, in leaving the banking sector to manage small business and consumer debtors in ‘tailored arrangements’, risk allowing financial welfare goals to be unmet. Financial welfare goals are important to the Financial Conduct Authority’s (FCA) consumer protection
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Governance in the era of Blockchain technology in Qatar: a roadmap and a manual for Trade Finance Journal of Banking Regulation Pub Date : 2021-09-03 Ibrahim, Imad Antoine, Truby, Jon
Nations worldwide have sought to capitalize on the benefits of distributed ledger technology (DLT) including Blockchain, but struggled to strike a balance between encouraging investment and innovation in the technology while addressing the challenges and uncertainties through regulation. Through its FinTech (Financial Technology) Strategy, Qatar has sought to embrace DLT, but its regulatory approach
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The impact of bank regulation on bank lending: a review of international literature Journal of Banking Regulation Pub Date : 2021-08-31 Thamae, Retselisitsoe I., Odhiambo, Nicholas M.
This paper reviews the theoretical and empirical literature on the impact of bank regulation on bank lending. It also structures the empirical evidence according to the impact of various bank regulatory measures on bank lending. The surveyed theoretical literature generally indicates that the impact of bank regulation on lending could be asymmetric, depending on the trade-off between the costs and
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Taxation of the financial sector: Is a bank levy the answer to the financial crisis? Journal of Banking Regulation Pub Date : 2021-08-14 Puławska, Karolina
To reduce the probability of financial crises, policymakers have introduced bank levies, whose application differs across countries. The problem in their use lies in identifying the most effective regulatory instruments to reduce risk. Our study might be of interest to various researchers and professionals, as we discuss the significance of research on bank levies with respect to theory and economic
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Limiting too-big-to-fail: market reactions to policy announcements and actions Journal of Banking Regulation Pub Date : 2021-08-14 Bellia, Mario, Maccaferri, Sara, Schich, Sebastian
Banks considered too-big-to-fail (TBTF) tend to benefit from funding cost advantages as their debt is considered implicitly guaranteed by public authorities, even if the latter have undertaken substantial effort to limit TBTF. This paper focuses on the changes in related market perceptions in response to bank regulatory and resolution reform announcements as well as actual failure resolution actions
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National central banks in EMU: time for revision? Journal of Banking Regulation Pub Date : 2021-08-11 van der Sluis, Marijn
The national central banks of the euro area are crucial to the monetary policy of the euro. Their Governors sit (on a personal title) on the Governing Council of the ECB, and they execute most of the monetary policies. Whereas the recent ruling by the German Constitutional Court on the Public Sector Purchases Program highlighted the uncomfortable role of the German Bundesbank in between national and
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Is there an audit gap in EU banking supervision? Journal of Banking Regulation Pub Date : 2021-07-21 David Baez
Since 2015 European and national audit offices have been expressing discontent with their audit powers regarding banking supervision. Key to this discontent is the European Court of Auditor’s limited mandate vis-à-vis the ECB’s supervisory activities, which in practice means that the former does not have towards the ECB’s Single Supervisory Mechanism the same full audit powers it has vis-à-vis all
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The Single Supervisory Mechanism (SSM) and the EU Anti-Money Laundering framework compared: governance, rules, challenges and opportunities Journal of Banking Regulation Pub Date : 2021-07-13 Gianni Lo Schiavo
The governance models of banking supervision in the Single Supervisory Mechanism (SSM) and Anti-Money Laundering (AML) have been subject to relevant developments in recent years. These have reshaped institutional and rule designs in the European Union, especially the relation between the national and supranational level. Since 2014, the European Central Bank (ECB) has supranational tasks and powers
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Modeling the platform-based banking in commercial banks of Iran Journal of Banking Regulation Pub Date : 2021-07-13 Mohammad Bagher Arayesh, Mostafa Rezaeirad, Mohammad Aidi, Tohfeh Ghobadi Lamuki
Platform-based banking provides opportunities for financial systems to increasing competition, stimulating a FinTech economy, and improving the availability and quality of service to the customers. Platform-based banking is a system that provides a user with a network of financial institution’s data through the use of application programming interfaces. With the help of platform banking, it is easy
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State aid after the Banking Union: serious disturbance and public interest Journal of Banking Regulation Pub Date : 2021-07-08 Phedon Nicolaides
An objective of the European Union’s Banking Union is to prevent Member States from having to subsidise banks. The Single Resolution Mechanism may have limited but has not eliminated state aid to banks. This is shown by the relevant statistics, the number of positive Commission decisions and the provisions of the Single Resolution Mechanism Regulation. State aid is allowed in three situations: when