The collapse of SVB and other US banks earlier this year was the result of concurring factors, including the specific and concentrated nature of their businesses, inadequate risk management and poor corporate governance. Consideration as to whether the regulatory framework for these banks (defined as medium-sized under the US Economic Growth, Regulatory Relief and Consumer Protection Act of 2018) was appropriate, and whether a lack of supervisory focus may also have been a factor behind the failures, has since taken place The US Fed published the findings of its review in April and the US bank regulatory agencies have now issued a proposal which, together with the implementation of the final components of Basel 3, extends a broader set of prudential requirements to some banks previously classified as medium-sized.
In the EU, the implementation of the Dec 2017 Basel standard is very close to finalization and a review of the crisis management framework is in progress. Beyond the these workstreams, international bodies such as the FSB and BCBS are looking at whether adjustments to the global recovery and resolution framework, as well as certain aspects of international prudential standards, are necessary given that shocks in one jurisdiction can quickly propagate to other regions.
By addressing questions such as those below, this EPFSF educational seminar aims to provide factual insights into the practical functioning of the EU regulatory system and comparisons with the US’s framework. It is aimed at those assisting decision makers with considerations around the need for further adjustments to the EU’s banking framework:
• How do the regulatory and supervisory frameworks for mid and large banks in theEU and US work in practice?
• How does crisis management function in the EU compared to the US, both todayand bearing the CMDI proposals in mind?
• How do European supervisors ensure banks manage their interest rate risk (IRR)and what is EU banks’ exposure to IRR now?
• How do EU banks account for the high-quality assets they hold as liquidity buffersand how does accounting treatment interact with the prudential framework? Whatare the differences between the EU and US?
• How exposed are EU banks to the “crypto or fintech sector(s)”?
• What did the US Fed review conclude and what has been taken forward?
• Which aspects of the international framework are under review and what is knownabout the time frame for concluding this work?
• Does technology make banks more vulnerable to bank runs than in the past?
• What role does social media play in propagating fears around banks?