“Everyone can contribute to the stability of the financial system by acting prudently. Every banker, every investor affects the stability of the financial system, and is affected by it.”

“The endorsement of the Basel III reforms represents a major milestone that will make the capital framework more robust and improve confidence in banking systems.”

“A strong banking sector in Europe is a diverse banking sector. We need small banks servicing local communities and businesses. And larger banks operating and lending right across the single market.”

The EBF supports financial services regulation that protects consumers, promotes market integrity and supports long term investment, economic growth and job creation in Europe. Following the global financial crisis in 2008, the EU in cooperation with the G20 have set out to deliver an ambitious reform agenda to restore financial stability and public confidence in the financial system. The completed reform agenda in Europe now includes:
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an updated supervisory framework with strengthened capital and liquidity requirements and enhanced banking supervision
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a new crisis management framework for banks with recovery and resolution tools for resolution authorities,
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more effective deposit protection for faster pay-out,
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the creation of the banking union with a single supervisory mechanism and single resolution mechanism for the euro area.
Overall, these reforms have made the European financial system more stable, resilient whilst providing a more harmonised single rulebook for EU banks that is consistent with international standards. However, international policy making for financial services remains an ongoing process that continuously reviews evolving risks to keep the regulatory framework up to speed with technological and economic developments.
At the same time many of the reforms that have been implemented or are still in the process of being implemented need to be monitored for unintended consequences and potential divergences with other jurisdictions that could lead to an unlevel playing field for European banks. If necessary, existing rules need to be re-calibrated to reduce the burden for European banks so they can continue to finance economic growth and jobs and remain competitive in global financial markets.
DEALING WITH RISKS
The financial crisis has shown that losses in the financial sector can be extremely large when a downturn is preceded by a period of excessive credit growth. Existing regulation and supervision of the banking system at European and global level proved inadequate to prevent the failure of banks as they entered the crisis with insufficient quantity and quality of capital and liquidity. As a result the governments had to provide support to the banking sector in many countries to ensure financial stability. The updated Capital Requirements Regulation (CRR) is the transposition into EU law of the Basel III accord which aims to decrease the likelihood that banks go insolvent and to absorb potential losses without bail-out.
BANKING UNION
MANAGING THE GONE CONCERN
The EBF is engaged in the debate on international standards and EU legislation on prudential requirements. Since the financial crisis of 2008, the banking system has significantly reinforced its capacity to withstand adverse situations and deal with credit risk, market risk and operational risk, via the Pillar 1 of the Basel Accord. It has also implemented measures to deal with other risks, including interest rate risk, concentration risk and systemic risk. The EBF contributes with cutting-edge expert views on risk management.
CHIEF ECONOMISTS’ GROUP
The Chief Economists’ Group (CEG) is engaged in macro-economic and monetary affairs, at European and international levels, in relation to the banking sector in Europe. The CEG, chaired by Mr Helge Pedersen (Nordea Bank’s Group Chief Economist), comprises high-level experts in macro-economic and monetary analysis, such as banks’ and national banking associations’ chief economists.
The CEG also performs a role supporting the work of the different EBF Committees providing analysis of economic and monetary policy issues.
EBF BANKING SUPERVISION TEAM

Gonzalo Gasos
E-mail
g.gasos(at)ebf.eu

Sarah Schmidtke

Francisco Saravia
E-mail
f.saravia(at)ebf.eu

Saïf Chaïbi

Mireille Thiery
E-mail
m.thiery(at)ebf.eu