FINANCIAL SECURITY NET AS A FACTOR BANKING SYSTEM

STABILITY

Dr Elena Stavrova

ECCE Conference, Tallinn,

16-18.06.2013

Global trends:

• Main components of the macroeconomic environment have increased;

• Financial industry occupies an advantageous position ;

• Adopt and adapt to technological advances ;• The need for integration of financial systems ;• To do of regulatory pressure monitoring

Main goals of safety net:

• First - protecting the rights of investors in the banks and the public by the turmoil in the banking system.

• Second - is to encourage investors to hold stable government

Key objectives

• First - they offer the construction of a single supervisory mechanism on the stability of the banking systems of the Member States;

• Second, synchronized systems of bank deposits guarantee;

• Third, development of uniform mechanisms for liquidation of failed banks.

Dealing with the "too big to fail"

• Too big to fail, to big to be monitored , to big to be controlled;

• Purposes- to prevent bank depositors and it's creditors

Mitigation of universal banking risks

• Bank panic

• Universal and investment bank

differences

Regulation of non-banks

• Shadow banking system –

• as an easy credit companies ,

• hedge funds,

• private equity funds,

• insurance companies,

Improve transparency

• efficient supervision

• ‘The corporate governance framework should ensure that timely and accurate disclosure is made on all material matters regarding the corporation, including the financial situation, performance, ownership, and governance of the company.

Determining "sufficient capital"

• higher levels a larger buffer to meet the turmoil in a recession

Rethinking supervision model

• European banking union :• To break the link between the Member States governments and their banks and their involvement in uncontrolled use of banks to finance budget deficits; to restore lost trust in the financial sector; Establishment of a system for ensuring investments and savings to customers of banking institutions; to ensure that banks do serve the community and the real economy.

Achieving international cooperation

• International claims of banks increased ;

• well-realized international bond market;

• a high risk of spreading from one country to another country

Thank you!!

stavrova@swu.bg