Towards Banking Union: Open Issues – High-level roundtable
The JRC and the College of Europe have organised today the second high-level roundtable on scientific support to financial stability. It stems from the 1st roundtable , in which the need for further scientific support and advice for Banking Union and structural reform of the EU banking sector was identified.
Michel Barnier, Commissioner for Internal Market and Services opened the discussions, along with Paul Demaret, Rector of the College of Europe and Dominique Ristori, JRC Director General. High-ranking financial experts, representatives of the scientific community, heads of industry and consumer associations and policy makers discussed the next steps of the Banking Union and the reinforcement of the Economic and Monetary Union.
Participants came from academia, the European Central Bank, the European Investment Bank, the European Stability Mechanism, the OECD, the European Securities and Markets Authority, think tanks and various permanent representations to the EU. Discussions were structured into 4 sessions, focusing on the potential separation of deposit and investment banking activities, the Single Supervisory Mechanism, the organisation of Macro-Prudential policies and the Single Resolution Mechanism.
During the conclusions, the JRC Director General underlined the need for scientific support in this endeavour. He provided specific examples on where this support could be useful, such as refining criteria for the selection of the banks under supervision of the SSM, supporting micro-prudential regulation, comparing different possible regulatory scenarios for the SRM and estimating potential costs and benefits of different options for a potential banking structural reform.
Agreement between the European Parliament and the Council on the creation of the Single Supervisory Mechanism was reached on 19 March this year, which is a decisive step towards a Banking Union. It paves the way for the development of the Single Resolution Mechanism architecture, in particular the way it will be funded. A greater scientific contribution should be involved from the beginning to ensure the development of a well-structured Banking Union.
On the structural reform of the EU banking sector, the European Commission will communicate during the summer 2013 on the follow-up to the Liikanen recommendations. The Commission is currently investigating various policy options without any taboo, also based on current national initiatives. In the meantime, the costs and benefits of a potential EU structural banking reform will be assessed. Indeed, it is essential to strike the right balance between reducing contagion and protecting bank customers while not restricting financing to the real economy.
Session I - Towards a separation of deposit and investment banking activities
- Keynote speaker: Towards a separation of deposit and investment banking activities, Jan Pieter Krahnen, Member of the High-level Expert Group on reforming the structure of the EU banking sector, Director of the Center for Financial Studies and of the new Center of Excellence SAFE
Session II - The Single Supervisory Mechanism: practicalities and issues at stake
- Keynote speaker: The Single Supervisory Mechanism: Practicalities and issues at stake, Frank Smets, Director-General, Directorate-General Research, European Central Bank
- Discussant: Science, the SSM and the full Banking Union, Francesca Campolongo, Head of Scientific Support to Financial Analysis Unit, Joint Research Centre, European Commission
- Discussant: The Single Supervisory Mechanism: practicalities and issues at stake, Wim Mijs, Chairman of the Executive Committee of the European Banking Federation, Chief Executive Officer of the Dutch Banking Association
Session III - The organisation of Macro-Prudential Policies in Europe
- Keynote speaker: How to Organize Macro-Prudential Policies in Europe, Charles Goodhart, Professor Emeritus, London School of Economics
Session IV - The Single Resolution Mechanism: state of play and next steps
- Discussant: Towards the Banking Union : Open Issues - The Single Resolution Mechanism : State of play and next steps, Klaus Trömel, Director-General, Risk Management Directorate, European Investment Bank