Macro-Finance Salon (No. 93): European Banking Sector-Back to Health?
2018-05-18 IMI
According to Ms. Nykänen, in the recent years European banking sector’s health has improved drastically. While differences remain between countries, banks are much better capitalized and more liquid than before. So far environment of low interest rates has not had a large effect on banks’ profitability. As banks have returned to health, the European regulatory framework for banks has been overhauled. Introduction of the Single Supervisory Mechanism as well as resolution and crisis management framework for banks have been very important. Nevertheless, important steps – e.g. European deposit insurance scheme – are still needed to complete Banking Union.
In the discussion, the guests interacted and exchanged ideas with each other. They discussed the following hot topics: functions of central banks; monetary policies, macro prudential policies and regulatory policies of the European Central Bank (ECB); the ECB’s attitude towards such unconventional monetary policies as quantitative easing; problems faced by single resolution funds and solutions; the investment environment and the development of enterprises in Europe; current situation, problems and future of the banking system; current situation, future plans and disposal of European banks’ debt portfolios; regulatory responsibilities, regulatory cost, regulation of the banking sector in Europe after the financial crisis, regulatory and related existing problems in the Chinese banking sector; regulatory policies under the unbalanced development of the banks; ECB’s monetary policies under the Sino-US trade conflictions, etc.
