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Cross-Border Banking in Europe: what regulation and supervision?

Cross-Border Banking in Europe: what regulation and supervision?
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In a discussion paper published today, UniCredit Group's Institutional and Regulatory Strategic Advisory, headed by Carmine Lamanda, stresses the importance of a new supervisory framework for European multinational banking groups as well as a new regulation which should set out the powers and responsibilities of the parent company within the Banking Group.

 

The free movement of capital is a key element of the European Union and underpins the Single European Market.
Cross-border banks are a European and global reality and they are crucial in maintaining and developing financial and economic integration. Their internal capital markets create a cross-border market in retail banking and contribute to managing risks efficiently. The parent company defines a group and the group's strategy. However, cross-border banks also need effective regulation and supervision to function properly. New regulation should level the playing field and eliminate obstacles to the effective functioning of a group.

 

Concerning supervision, we welcome the de Larosière Group's recommendations and agree that a European solution is necessary. In this context, we stress the importance of a new regulation for multinational banking groups which should set out the powers and responsibilities of the parent company within the group.
Day-to-day supervision requires that supervisors be close to a business and therefore national supervision is vital. Supervision of strategic decisions at the consolidated level requires a college of supervisors to understand the global effects and externalities of those decisions. A European Banking Authority should set supervisory standards, participate within each college and define issues and, if necessary, have the final legally binding decision in the college.

 

In the event of a crisis, the European Banking Authority can also play a key role in early intervention to help reduce costs.

 

Enclosed the discussion paper.

Discussion paper 3276kB