E Point Perfect
Law \ Legal

ECB publishes Working Paper on voluntary support and ring-fencing in cross-border banks


On 28 July 2022, the European Central Bank (ECB) published a Working Paper on voluntary support and ring-fencing in cross-border banks.

The paper provides a theoretical contribution to the ring-fencing debate in the context of supervisory intervention in an impaired subsidiary of a cross-border bank (CBB).

Amongst other things, the paper addresses the following questions:

  • When does ring fencing limit cross-unit voluntary support and how does this affect the efficiency of the intervention outcome?
  • How does the anticipation of ring-fencing impact on the cross-border bank’s risk taking incentives?
  • Under what condition would the establishment of a supranational authority be welfare improving, and is it compatible with the interests of national authorities to protect national deposit insurance funds?

To answer these questions, the ECB develops a framework in which a CBB may wish to provide voluntary support to an impaired subsidiary using resources from a healthy subsidiary.



Source link

Related posts

Employers Face Uncertainty After SCOTUS Abortion Rights Decision in Dobbs v. Jackson Women’s Health Organization

CSPI offers suggestions for FDA on data collection regarding on-farm antimicrobial use

FILM EXECUTIVE SENTENCED TO 6 YEARS IN JAIL FOR DEFRAUDING INVESTMENT FUND

Florida’s New Ransomware and Cybersecurity Requirements/Restrictions

Joint Committee report on risks and vulnerabilities in the EU financial system

That Ninth Circuit Delta-8 Opinion and What’s Followed – It’s Not a Green Light for Intoxicating Hemp, Part 2