Bank resolution in times of COVID-19
The Single Resolution Board and the Florence School of Banking and Finance (European University Institute) organised an interdisciplinary Academic Event on ‘Bank resolution in times of COVID-19’. The event took place on Friday, 27 November 2020 (09.15-12.45) in an online format.
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 COVID-19.
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AgendaFriday, 27 November 2020 (09.15-12.45)
09.15 – 09.20 | Welcome and Introduction
Bart P.M. Joosen (Professor of Financial Law, Vrije Universiteit Amsterdam)
09.20 – 10.40 | Session 1
Chaired by Sebastiano Laviola (Board Member and Director of Strategy and Policy Coordination, Single Resolution Board)
09.20 – 10.00 | “A Proposal for a temporarily amended version of Precautionary Recapitalisation under the Single Resolution Mechanism Regulation involving the European Stability
Christos Gortsos (Professor of Public Economic Law, National and Kapodistrian University of Athens), Michele Siri (Professor of Commercial Law, University of Genoa), Marco Bodellini (Associate Lecturer in Banking and Financial Law, Queen Mary University of London)
Discussant: Emiliano Tornese (Deputy Head of the Resolution and Crisis Management Unit in the European Commission, DG FISMA)
10.00 – 10.40 | “Deposit guarantee schemes and bank crisis management: legal challenges arising from the actual EU legal framework”
Irene Mecatti (Adjunct Professor of Business and European Banking Law, University of Siena)
Discussant: Seraina Grünewald (Professor of European and Comparative Financial Law, Radboud University Nijmegen)
10.40 – 10.45 | break
10.45 – 11.15 | Keynote Speech by Jan Reinder De Carpentier (Vice Chair of the Single Resolution Board)
Chaired and Moderated by Elena Carletti (Professor of Finance, Bocconi University)
11.15 – 12.40 | Session 2
Chaired by Tobias Tröger (Professor of Private Law, Commercial and Business Law, and Jurisprudence at the Goethe-University Frankfurt am Main)
11.15 – 11.55 | “Removing the regulatory barriers to cross-border banking. Regulatory initiatives to foster banking integration and financial stability in the Banking Union”
Nikos Maragopoulos (Associate Researcher, European Banking Institute)
Discussant: Nicola Costa (Senior Bank Recovery and Resolution Expert, Single Resolution Board)
11.55 – 12.35 | “Banking System in Time of Covid-19: a reverse Analysis on Loss Absorption Capacity, Lending to the Economy and Market Valuation”
Antonio Dicanio (Seconded National Expert, Single Resolution Board), Giuseppe Montesi (Adjunct Professor, School of Economics and Management, University of Siena)
Discussant: Thorsten Beck (Professor of Banking & Finance, CASS Business School)
12.35 – 12.45 | Concluding Remarks
by Boštjan Jazbec (Board Member and Director of Resolution Planning and Decisions, Single Resolution Board)