Staggered Completion of the European Banking Union: Transposition Dates of the BRRD
IWH Technical Reports,
In May 2014, the European Commission published the Bank Recovery and Resolution Directive (BRRD). The directive introduces rules on bank resolution and restructuring including a bailin tool. It constitutes the legal foundation underlying the Single Resolution Mechanism (SRM). Member countries of the European Union (EU) had to transpose this directive into national law by 31 December 2014 and implement the rules on resolution and restructuring of failing banks from 1 January 2015 onwards. However, many countries delayed the implementation. We assemble a dataset on national transposition dates of the BRRD across the EU-27 countries.
Completing the European Banking Union: Capital Cost Consequences for Credit Providers and Corporate Borrowers
IWH Discussion Papers,
The bank recovery and resolution directive (BRRD) regulates the bail-in hierarchy to resolve distressed banks without burdening tax payers. We exploit the staggered implementation of the BRRD across 15 European Union (EU) member states to identify banks’ capital cost and capital structure responses. In a first stage, we show that average capital costs of banks increased. WACC hikes are lowest in the core countries of the European Monetary Union (EMU) compared to formerly stressed EMU and non-EMU countries. This pattern is driven by changes in the relative WACC weight of equity in response to the BRRD, which indicates enhanced financial system resilience. In a second stage, we document asymmetric transmission patterns of banks’ capital cost changes on to corporates’ borrowing terms. Only EMU banks located in core countries that exhibit higher WACC are those that also increase firms’ borrowing cost and contract credit supply. Hence, the BRRD had unintended consequences for selected segments of the real economy.
What’s slowing down the European Banking Union?
LSE Business Review,
Differences in national bank regulation and supervision hamper the process; political factors play a minor role, write Simon Grothe, Michael Koetter, Thomas Krause, and Lena Tonzer
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Joint Economic Forecast
Joint Economic Forecast The joint economic forecast is an instrument for evaluating...
The Political Economy of the European Banking Union
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IWH-Transfertagung „Europas Finanzmarkt: Zwangsehe oder lose Bekanntschaft?“
Wirtschaft im Wandel,
Ein Jahrzehnt nach der weltweiten Finanzkrise steht das Finanzsystem noch immer vor enormen Herausforderungen. Wie diese in Europa gemeistert werden können, war Thema einer hochkarätig besetzten Tagung, die am 26. Februar 2020 am Leibniz-Institut für Wirtschaftsforschung Halle (IWH) stattfand.
Centre for Evidence-based Policy Advice
Centre for Evidence-based Policy Advice (IWH-CEP) ...