The European Banking Union, 1st ed. 2016 Supervision and Resolution Palgrave Macmillan Studies in Banking and Financial Institutions Series

The 2008 financial crisis all but brought down the financial system and real economies of industrial countries. The Banking Union took a broad approach to resolve the structural fragmentation and distortions in the European banking system which were major obstacles to a working single market for financial services. This book examines the numerous changes happening to European legislations for the prevention and management of banking crises. What emerges is a changing picture of regulations and institutions, of goals, tools and opinions, public and private, European and national all involved in the task. The book focuses on the new framework for banking crisis management, starting from the foundations of banking regulation and supervision. It explores the institutional architecture of banking supervision and crisis management, the powers of the authorities, the tools for administrative actions, the complexities of business and bankruptcy laws, individual rights and their legal guarantees.

Index Preface & Introduction Preface Introduction Some Preliminary Observations On The New Legal Framework PART I: THE FINANCIAL CRISIS AND THE BANKING UNION PROJECT 1. The Weakness Of The Institutional Framework For Managing Banking Crisis Before The Financial Crisis 2. First Timid (And Difficult) Attempts To Regulate Banking Insolvency 3. The Answer To The Financial Crisis: The Banking Union Project PART II: THE FIRST PILLAR OF THE BANKING UNION: THE SINGLE SUPERVISORY MECHANISM 4. The Evolution Of Banking Supervision At The European Level 4.1. The First Phase: The Reform Of Regulation Procedures (The Lamfalussy System) And The Logic Of Cooperation And Coordination In Banking Supervision 4.2. The Second Phase: Strengthening International Cooperation And The Creation Of European Supervisory Bodies (De Larosière Project) 4.3. The Point Of Arrival: The Centralization Of Supervisory Functions (The Single Supervisory Mechanism 5. The Single Supervisory Mechanism: The Legal And Institutional Profiles 5.1. The Allocation Of Responsibilities Between ECB And National Supervisory Authorities 5.2. The Potential Conflict Of Interest Between Supervisory And Monetary Policy Functions. The Independence And Separation Principles 5.3. The Relations With EBA (European Banking Authority) 5.4. The Organization Of Shared Supervision 5.5. The Preparatory Stage Of The SSM 5.6. The Role Of ECB In Banking Crisis Management PART III: THE EUROPEAN REFORM OF THE RULES FOR BANKING CRISIS MANAGEMENT: THE BANK RECOVERY AND RESOLUTION DIRECTIVE 6. The New European Rules For Crisis Management 7. The Setting Up Of National Resolution Authorities 8. A Significant Innovative Theme: The Handling Of Cross-Border Group Crises. The Establishment Of Resolution Colleges 9. A New Strategic Approach: Towards A Complete And Integrated Vision To Deal With Crisis Phenomena 9.1 Preparatory And Preventative Measures 9.1.1. Recovery Plans 9.1.2. Resolution Plans 9.2 Early Intervention 9.2.1. Definition Of Triggers For Intervention 9.2.2. Choice Of Early Intervention Tools. 9.3. Resolution 9.3.1. Triggers For Resolution Action 9.3.2. Powers Of The Resolution Authority 9.3.3. Resolution Tools 9.3.4. Government Financial Stabilisation Tools 9.3.5. Safeguards For Third Parties 9.4 Liquidation 10. Financing Resolution. The Establishment Of The Bank Resolution Fund (BRF) 10.1. Funding Mechanism 10.2. The Use Of Bank Resolution Funds 10.3. Intervention Of Deposit Guarantee Schemes In The Resolution. 10.4. Recourse To The European Stability Mechanism (ESM) 11. A Challenge For The Future. The Harmonisation Of Insolvency Regimes PART IV: THE SECOND PILLAR OF THE BANKING UNION: FROM THE NATIONAL RESOLUTION AUTHORITIES TO THE SINGLE RESOLUTION MECHANISM 12. The Regulatory Path Towards The Centralization Of Crisis Management 13. Conferring Tasks On To The Single Resolution Authority Tasks. The Legal Basis 14. Decision-Making Process In Resolution: A Fractious, Perhaps Inevitable, System 15. The Setting-Up Of A Single Resolution Fund 15.1. Financial Resources And Funding Mechanism Of The Single Resolution Fund 15.2. The Intergovernmental Agreement On Transfer And Mutualization Of Resources To The Single Resolution Fund 15.3. Contribution Mechanism To The Fund 15.4. Relations Between The SRF And The Deposit Guarantee Systems PART V: THE THIRD PILLAR OF THE BANKING UNION: THE PAN-EUROPEAN DEPOSIT GUARANTEE SCHEME 16. The Role Of Deposit Guarantee Schemes 17. The 94/19/EC Directive 18. DGSD Reform: From Minimum To Maximum Harmonization 18.1. The Reform Process And General Lines Of Regulatory Intervention 18.2. Main Aspects Of The Reform 18.2.1. Scope Of Guarantee, Payout Procedures And Timeframe 18.2.2. Stress Test Of Deposit Guarantee Systems 18.2.3. Financial Means Of DSG And Funding Mechanism 18.2.4. Use Of Funds 18.2.5. Institutional Protection Scheme 18.2.6. Cooperation And Exchange Of Information Between DGSS And Other Authorities Within The Safety Net 18.2.7. Cross-Border Cooperation. PART VI: BANKING CRISES AND STATE AID DISCIPLINE 19. State Aid General Rules 20. The Special Discipline For The Financial Sector 21. The 2013 Communication Of The European Commission 22.1. The Burden-Sharing Principle And The Need For A Bank Restructuring Plan 22.2. Recapitalization And Impaired Asset Measures 22.3. Guarantees And Liquidity Support 22.4. Intervention Of Deposit Guarantee Schemes 22.5. Aid To Bank Liquidation 23. The Rationale For EU Action: The Growth Target PART VII: CONCLUSIONS 24. The Implant Of The New European Regulations On Banking Crisis Management In National Legislations 25. The Identification Of The Resolution Authority 26. The Scope And The Use Of Tools: The Flexibility Of The Directive And The Room For Discretionary Measures Left To Member States 27. The Safeguards For Subjects Affected By Resolution Measures 28. DGSD Implementation: National Legislative Choices Bibliography

Giuseppe Boccuzzi is Director General of the Fondo Interbancario di Tutela dei Depositi (Interbank Deposit Protection Fund). After a long career as officer in the Bank of Italy where he headed up a Special Unit on Banking Crisis within the Banking and Financial Supervisory Department, he coordinated a working group for the implementation of Basel II in the Italian legislation. He participated in the work of the European Commission for the preparation of the 94/19/EC Directive on Deposit Guarantee Schemes and the 2001/24/EC Directive on the Reorganization and Winding-Up of Credit Institutions, and was appointed to the Financial Stability Forum's 'Task Force on Dealing with Weak Banks', in collaboration with the World Bank and the International Monetary Fund. He was the Bank of Italy's representative to the Basel Committee on Banking Supervision from 2006 to 2008, and was appointed to both the 'Core Consultative Group' organized by the World Bank and IMF, and the 'Core Principles Liaison Group'. In the last three years he was Director of the Bank of Italy branch in Naples.
Giuseppe Boccuzzi has a national qualification as Associate Professor in Law and Economics, and lectures on Banking and Insolvency Law. He has written numerous publications in the field of regulation, banking crisis management and bankruptcy law.