From the start of 2016, new rules for bank resolution are in place – as spelled out in the Bank Recovery and Resolution Directive (BRRD) – across the EU, and a new authority (the Single Resolution Board, or SRB) is fully operational for resolving all banks in the eurozone.The implementation...

Making banks resolvable or “safe to fail” is a key component of the regulatory reform program enacted in response to the crisis. This paper designs a bank that will be resolvable, first for a bank in a single jurisdiction and then for a banking group with branches and/or subsidiaries in...

The EU's banking union aims to break the “doom loop” that makes governments dependent on banks and banks dependent on governments. However, current arrangements address only the first objective: the single supervisory mechanism should make banks less likely to fail. The single resolution...

Governance at banks, especially major banks, requires further reform, especially with respect to incentives. Supervisors are concerned that incentives may make executives prone to take “excessive” risks. Shareholders are concerned that banks rarely earn their cost of capital.What's needed is...

Banks have long played a special role in the financial system. Individuals and institutions use banks to access the payment system, and central banks rely on banks to transmit monetary policy to the real economy. Hence, financial and economic stability has rested on the stability of the banking...

Capital is controversial. Banks complain that regulators demand too much. Critics complain that banks have too little. A few lone voices contend that banks have just about enough, thanks to the regulatory reform measures taken over the past decade in the wake of the financial crisis. Who's...

Banks have long played a special role in the financial system. Individuals and institutions use banks to access the payment system, and central banks rely on banks to transmit monetary policy to the real economy. Hence, financial and economic stability has rested on the stability of the banking...