SRB-FBF academic event: Bank resolution in times of COVID-19

The Single Resolution Board and the Florence School of Banking and Finance (European University Institute) are organising an interdisciplinary Academic Event on ‘Bank resolution in times of COVID-19’. The event will take place on 27 November 2020 online.

The COVID-19 pandemic is challenging the European Union and the principles and instruments of its recently established Banking Union. Fortunately, great strides have been made towards financial stability in the last 12 years. European policymakers have created and shaped a de facto macroeconomic financial stability objective, in which the resolution pillar plays an important role. Financial stability and bank resolution are currently striding along the road, and their relationship remains debated. Some have argued that bank resolution fosters financial stability, by preventing unexpected and disorderly bank exits from the sector. Others have contended that the potential enforcement of some resolution tools, such as bail-in, may represent a risk for the stability of the system.

During its four years of existence and well before the COVID-19 emergency, some building blocks of the crisis management framework have been challenged. It has been argued that the consistency of the resolution regime with other instruments, such as the European Stability Mechanism facilities, and with national legal orders (e.g. domestic insolvency regimes, safeguard of creditor’s property rights, national central bank resources) could be further improved, also to ensure more legal certainty. The firepower of the Single Resolution Fund depends also on the introduction of the Common Backstop, potentially provided by the European Stability Mechanism.

  • Will this step contribute to the prevention of financial instability?
  • Will the design of the resolution framework prevent a second wave of bank bail-out in the European Union in the COVID-19 context?
  • To what extent can the stability of the European banking sector be maintained while minimising the use of public funds in the banking sector?

Against this background, the aim of the event is to bring together leading scholars and policy-makers in order to discuss economic, financial, legal, political and public policy topics located at the intersection between financial stability and bank resolution and in the context of the Covid-19 outbreak. 

 

Please see below selected papers and the presentations used during the event:

Title

Submitted by

A Proposal For A Temporarily Amended Version Of Precautionary Recapitalisation Under The Single Resolution Mechanism Regulation Involving The European Stability Mechanism

Christos Gortsos,

Michele Siri,

Marco Bodellini

Deposit guarantee schemes and bank crisis management: legal challenges arising from the actual EU legal framework

Irene Mecatti

Removing the regulatory barriers to cross-border banking

Nikos Maragopoulos

Banking System in Time of Covid-19: A Reverse Analysis on Loss Absorption Capacity, Lending to the Economy and Market Valuation 

Antonio Dicanio,

Giuseppe Montesi

 

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