European Banking Regulation

Since the financial crisis, the field of banking regulation has seen an unprecedented wave of regulatory reform throughout the world. In Europe, the focus is on the creation of a Eurozone Banking Union which consists of three major components: a single bank supervisory mechanism, a common bank crisis management and resolution system, and a uniform system of deposit insurance. Those efforts have been supported by rules on the corporate governance of banks, especially on executive compensation, by a structural reform of the financial derivatives market and through other regulatory acts. This regulatory tsunami raises a number of questions: Why do banks need special regulation besides their obvious systemic importance for the financial system? How effective will the European single bank supervisory mechanism be? Does the common bank crisis management and resolution system successfully tackle the moral hazard problem of running a bank that is 'too big to fail'? Do the new rules on executive compensation mitigate this problem? How much safer will deposits be after the reformed system of financial deposits, and what are the costs?These and other questions were addressed at an international conference held in Munich in July 2014. This book is a report on the outcome of that conference.Dr Horst Eidenmüller is Chair for Commercial Law at the University of Oxford and Professorial Fellow at St. Hugh's College, Oxford; Dr. Mathias Habersack and Dr Lars Klöhn are Professors of Civil and Corporate Law at the Ludwig-Maximilian-University of Munich.