scholarly journals The eurozone target-system from the perspective of Portugal

2018 ◽  
Vol 68 (3) ◽  
pp. 353-376 ◽  
Author(s):  
Raquel R. da Costa ◽  
Sérgio Lagoa
Keyword(s):  
Financial Stability ◽  
Sovereign Debt ◽  
Fixed Effects ◽  
Debt Crisis ◽  
Country Risk ◽  
Target System ◽  
Explanatory Variables ◽  
Treasury Bond ◽  
European Banking ◽  
High Level

Payment systems make a significant contribution to the flow of transactions and financial stability. In this paper, we start by applying the principles of the gravity model to explain the TARGET flows of banking transactions between Portugal and other eurozone countries. The main explanatory variables tested are a composite indicator of economic and financial activities, distance, membership of the Eurozone (EZ), and country risk measured by treasury bond yields. The results indicate that Portugal has a high level of integration in the European banking market as distance is not statistically significant, and that the membership of the EZ facilitates the financing of the economy. The economic size of the partner country becomes non-significant after controlling for country fixed effects. The increase in the Portuguese country risk during the European sovereign debt crisis led to a marked decline in external financing, indicating that this is an important channel of transmission of crises.

scholarly journals Financial and Banking Regulation and Supervision within the EU

2013 ◽  
Vol 3 (2) ◽  
pp. 17-37
Author(s):  
Constanze Lehleiter
Keyword(s):  
Financial Stability ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Banking Regulation ◽  
Capital Requirements ◽  
Green Paper ◽  
Shadow Banking ◽  
The European Union ◽  
European Banking ◽  
The Eu

AbstractThe European Union (EU) has faced not only the international financial crisis, but also the European banking and the sovereign debt crisis. A lack of efficient regulations and supervision were a serious cause of recent developments. As a reaction, the EU finally implemented a framework covering both micro- and macro-prudential policies. Measures such as the new capital requirements, the deposit guarantee schemes, the green paper on shadow banking and, most importantly, the new approach for a macro-prudential supervision are headed towards crisis prevention. However, the challenge is to define regulations enhancing financial stability, which, at the same time, do not prevent institutions from generating reasonable financial risks and do not reduce growth. In that regard, the presented measures still have deficits which have to be faced. Furthermore, coordination between various authorities and the European Commission remains another challenge.

Greek Debt Restructuring Case

2021 ◽  
Vol 195 ◽  
pp. 227-238
Keyword(s):  
International Law ◽  
Financial Stability ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Secondary Market ◽  
Federal Republic Of Germany ◽  
Debt Restructuring ◽  
Content Type ◽  
State Immunity ◽  
Basic Law

227State immunity — Jurisdictional immunity — Exceptions — Acta jure gestionis — Acta jure imperii — Once a trader always a trader — State of emergency — Law-making — Legislature regulating legal relations initially established by acta jure gestionis qualifying as acta jure imperiiEconomics, trade and finance — European Monetary Union — Hellenic Republic — Public debt — Bonds — Greek sovereign debt crisis — Sovereign debt restructuring — Collective Action Clauses — Secondary market — Bond exchange — Financial stabilityRelationship of international law and municipal law — Compatibility with Basic Law of the Federal Republic of Germany — General principle of international law — Article 25 of German Basic Law — Right to a lawful judge — The law of Germany

Reforming the Regulatory Treatment of Sovereign Exposures in Banking Regulation

2020 ◽  
Vol 53 (1) ◽  
pp. 81-122
Author(s):  
André Sterzel
Keyword(s):  
Financial Stability ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Banking Regulation ◽  
Jel Classification ◽  
Bank Capital ◽  
Exposure Limits ◽  
Government Bonds ◽  
Balance Sheets ◽  
Bank Balance Sheets

Abstract The European sovereign debt crisis has shown the tight linkage between sovereign and bank balance sheets. In the aftermath of the crisis, several reforms have been discussed in order to mitigate the sovereign-bank nexus. These reforms include the abolishment of preferential government bond treatment in banking regulation. This paper gives a detailed overview of literature and data which are closely related to the existing preferential sovereign bond treatment in bank regulation and highlights the need for reforms especially in the euro area. Against this background, the following three regulatory reforms are described and discussed: (i) positive risk weights for government bonds in bank capital regulation, (ii) sovereign exposure limits, and (iii) haircuts for government bonds in bank liquidity regulation. The discussion focusses on the effects of these reforms for bank behaviour and financial stability. JEL Classification: H63, H12, G11, G18

Part II Bank Resolution, 9 European Bank Resolution Regime

2016 ◽  
Author(s):  
Olivares-Caminal Rodrigo ◽  
Douglas John ◽  
Guynn Randall ◽  
Kornberg Alan ◽  
Paterson Sarah ◽  
...  
Keyword(s):  
Financial Institutions ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Sovereign Debt Crisis ◽  
Technical Standards ◽  
Single Supervisory Mechanism ◽  
Single Resolution Mechanism ◽  
Bank Resolution ◽  
European Banking ◽  
New Framework

This chapter considers the response to the European banking and sovereign debt crisis, which resulted in the introduction of the Bank Recovery and Resolution Directive (BRRD). It also considers the Single Supervisory Mechanism (SSM) and a Single Resolution Mechanism (SRM) which will be implemented to facilitate the supervision and resolution of certain financial institutions in the Eurozone. The chapter looks at the consequences of these reform measures and explains the salient features of the new framework of supervisory and resolution intervention. It also looks separately at the EBA technical standards and guidance where necessary to assist the interpretation of the provisions in the directive.

A catalytic moment: The Greek crisis in the German financial press

2014 ◽  
Vol 25 (4) ◽  
pp. 446-466 ◽  
Author(s):  
Amelie Kutter
Keyword(s):  
Critical Discourse Analysis ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Discursive Construction ◽  
The European Union ◽  
Greek Crisis ◽  
Political Studies ◽  
Catalytic Role ◽  
High Level ◽  
Financial Press

The Greek crisis has attracted more public-political attention than any other sovereign debt crisis within the European Union. This article investigates the argument that this is due to the symbolic-catalytic role that the Greek crisis played in forging a specific approach to state rescue and the reform of the European Economic and Monetary Union (EMU). Drawing on assumptions of interpretive-narrative political studies about the discursive construction of crisis and a Critical Discourse Analysis of editorials from the financial press, the study shows how this approach was ‘catalyzed’ by a specific construction of the ‘Greek case’. Reference to the ‘Greek case’, in particular the high level of government debt, rendered austerity a plausible option of crisis management. Reference to the contagion potential of the Greek crisis justified the application of austerity across the Eurozone. The Greek crisis was also seen to reveal the systemic flaws of the EMU and suggest deepened economic integration.

Towards a full harmonization of the European banking regulation: Dilemmas in a legal discourse between regulation and enforcement

2019 ◽  
Vol 26 (2) ◽  
pp. 190-216
Author(s):  
Matteo De Poli ◽  
Pierre de Gioia Carabellese
Keyword(s):  
European Union ◽  
Sovereign Debt ◽  
Banking Sector ◽  
Debt Crisis ◽  
Banking Regulation ◽  
Main Theme ◽  
The European Union ◽  
Single Supervisory Mechanism ◽  
Legal Literature ◽  
European Banking

With the birth of the Single Supervisory Mechanism came the emergence of a new regime of supervision of the banking industry in the Eurozone. The allocation of enforcement powers between the European Central Bank and the National Competent Authorities is the corollary of the unified supervision, which reverberates from the Single Supervisory Mechanism, and it is ultimately the main theme of this contribution. More specifically, the architecture of the enforcement, principally shaped by the SSM and its principles and rules, is assessed and analysed in this paper against the background of the general theory of enforcement, as developed in the legal literature. The enforcement discourse in the European Union banking sector is debated alongside its interaction with the related aspects of the regulation and supervision and the way these three notions have been integrated and codified in the European Union after the 2011 sovereign debt crisis.

Regulatory response to the financial crisis in Europe: recent developments (2010-2013)

2015 ◽  
Vol 7 (1) ◽  
pp. 29-50 ◽  
Author(s):  
Santiago Carbó-Valverde ◽  
Harald A. Benink ◽  
Tom Berglund ◽  
Clas Wihlborg
Keyword(s):  
Financial Crisis ◽  
Financial Stability ◽  
Sovereign Debt ◽  
Financial Regulation ◽  
Ad Hoc ◽  
Debt Crisis ◽  
Banking Union ◽  
Content Type ◽  
European Banking Union ◽  
Wide Range

Purpose – The purpose of this paper by the European Shadow Financial Regulatory Committee (ESFRC) is to provide an account of the financial crisis in Europe during the period 2010-2013 and an analysis of how the relevant authorities reacted to the crisis. Design/methodology/approach – These actions included measures taken by central banks, governments or fiscal authorities, and by regulatory or supervisory bodies. In a previous study covering the regulatory developments during the financial crisis up until 2009, issues such as the implementation of Basel III rules in Europe and the (mostly ad hoc and unilateral) resolution mechanisms set in most European countries to fight the crisis were covered. This study focuses on developments since 2010 with a focus on the concerns and actions that emerged with the sovereign debt crisis in the euro area. In particular, the transition from the European Financial Stability Facility to the European Stability Mechanism is assessed. The focus after 2012 has progressively turned to the challenges of the European banking union. Findings – These issues are jointly covered, along with some updates on the views of the ESFRC on recent advances in other areas, such as solvency regulation. All in all, the authors find that the weaknesses of the global financial system remain to be addressed, and they believe that the banking union is one of the main tools and opportunities for an improved and efficient crisis management in Europe. Originality/value – The paper aims at contributing to the study of financial regulation after the banking crisis. The experience of the euro zone in this context is assessed in this article from a wide range of perspectives.

Bank stockholders’ vs bank bondholders’ market discipline during crisis time: an investigation based on supervisory stress test information disclosure

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Moustapha Daouda Dala
Keyword(s):  
Financial Distress ◽  
Information Disclosure ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Stress Test ◽  
Abnormal Returns ◽  
Market Discipline ◽  
Content Type ◽  
European Sovereign Debt Crisis ◽  
European Banking

Purpose This paper aims to investigate how stockholders and bondholders react to the information disclosed on the financial markets during crisis periods. This paper considers the 2011 European Banking Authority’s stress test as it disclosed detailed information about banks. Design/methodology/approach It was conducted during the European sovereign debt crisis, and this paper uses an event study methodology. This paper analyzes the average cumulative abnormal returns for different subsamples of banks. This paper compares the reactions of stockholders and bondholders to the stress test by considering pre-results announcements (signal generating process) to the publication of the results on the disclosure date, using quantitative data for each individual bank that participated in the stress test (the signal provided to the financial market). Findings This paper finds that stockholders’ reaction is more sensitive to idiosyncratic components of the disclosed information, whereas bondholders are more influenced by systematic risk. A deeper investigation shows that subordinated bondholders tend to behave quite similarly to stockholders. This specific reaction of stockholders during financial distress may make them more likely than bondholders to impose market discipline during troubled periods. Originality/value This paper brings several new insights to the behavior of stock and bond holders during times of financial distress and makes recommendations to regulators that may serve to refine communication to markets to reduce the shock of negative news.

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