BGA Cable: EU Banking Regulations 

Unresolved issues impacting the EU Banking Sector 

EU ‘existential’ political concerns (Brexit, impending elections and rising populist sentiment) are impacting progression on EU banking regulations.  With the Banking Union being seen as indispensable for the continuation of the Euro (and by extension the EU itself), we believe EU banking regulations will be used to reinforce the inevitable drive towards a political union in the EU.
The current regulatory agenda is dominated by Basel IV discussions, implementation of risk reduction via CRR2/CRD5 and Bank Resolution regimes, as well as demands for a European bad bank.
The EU deposit guarantee scheme is the final piece of the banking union puzzle. But it is a highly sensitive political act. Currently, the Germans oppose it, seeing its feasibility as conditional on adequately resolving/minimizing potential ‘legacy’ liabilities via risk reduction mechanisms such as CRR2/CRD5, Basel IV and an EU regime for bank resolution.  They will likely mingle discussions on these regulations with any potential move towards a Deposit Guarantee Scheme.

Contact BGA to read the full cable.

Our Associates are closely monitoring developments so we can keep you updated on the regulatory situation in Brussels and their potential implications for financial markets. Contact us to schedule a call with our experts for more detailed views. 

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