Rivista di Diritto SocietarioISSN 1972-9243 / EISSN 2421-7166
G. Giappichelli Editore


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Banking groups and their challenges in crisis management (di Marco Lamandini)

Group-wide capital and liquidity management for banks is an essential component of a functioning Banking Union. This paper addresses the why and the how urgent regulatory action is needed in this domain.

Gruppi bancari e gestione della crisi

Una gestione integrata del capitale e della liquidità a livello di gruppo costituisce un requisito essenziale per il funzionamento (effettivo) dell’Unione Bancaria. Questo articolo illustra le ragioni, e le caratteristiche, di una possibile e necessaria iniziativa legislativa europea in materia.

1. – Contra spem sperare (or hoping without much hope yet remaining faithful after all): this, I guess, would be the right translation into Latin of the title of my closing speech today. Although so much water passed under the bridge in the law and practice of the Banking Union after the European Commission’s tabled amendments of November 2016 to Articles 7 and 8 CRR to make capital and liquidity waivers for EU banks’ subsidiaries available (or more widely available as to liquidity waivers) also on a cross-border level (something that should appear a quite obvious course of action at least in the Euro zone after the establishment and successful deployment of the SSM and SRM) encountered opposition by (some) Member States and were eventually dropped, and although a growing line of cases before the SRB’s Appeal Panel and the General Court[1] shows that even domestic waivers are a breeding ground for concerns due to the imperfections of the legislative framework, policy makers seem to consider a reform in this domain a dead letter. No surprise that there is nothing on this in the ongoing legislative train currently in its final way to CRR3 and CRD6. Is this good, and wise, policy? I surmise it is not. Yet I guess that any hope, as little as it may be, to resurrect the topic and revamp a balanced initiative in this domain lies, in the current political and economic circumstances, more in the compelling needs of the practice and in the nudges of the industry and academia than in the good will of the co-legislators, who seem still trapped into the Scylla and Charybdis of vague aspirations towards pan-European banks’ consolidation, yet also hard to die emotional concerns over debt mutualization and fearful ring-fencing. 2. – Looking at the unfinished work of the Banking Union from this angle, one gets the unpleasant feeling of being roughly 70 years late if compared to our US counterparts, still at the time of the political debates in the United States which preceded and laid the ground for the 1956 Bank Holding Company Act. Our fearful debates echo American taboos of the time against inter-state bank branching and subsidiarization, motivated, in the first place, by the fear that inter-state growth would allow large banks from big cities and major states to compete against state banks in small towns and minor states and against national banks (which originally were only allowed to operate a single branch), and, in the second place, the long-held concern that large banks would concentrate to much financial power. And the discussions around the third pillar of the Banking Union and the ill-fated EDIS proposal, weighed against the ninety years of the US FDIC, add food for thoughts. 3. – Being mindful that political appetite for a reform in this domain was and is at an historical low, despite its importance for the completion of the Banking Union, in the opening speech of our EBI Annual Global Conference of [continua..]