Internationally active banks can be a source of systemic risk as a default of one bank can easily spill over to banks in other countries. This implies that financial market stability in one country influences stability in another country. For this reason, different countries should have an incentive to cooperate. However, regulation and supervision of banks are still more present on the national than on the supranational level. On the one hand, the recent crisis has shown that regulation and supervision limited to the national level are not sufficient to prevent financial instabilities. On the other hand, different countries are very heterogeneous. For this reason, it will not be possible to align supranational regulation and supervision with banking sector specific characteristics of individual countries. The following research papers are focusing on how to implement regulation and supervision across countries. Thereby, they also discuss the tradeoff regarding regulation and supervision on the national and supranational level.
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Working and discussion papers
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Walther, A. and L. White (2019) Rules versus Discretion in Bank Resolution. CEPR Discussion Paper No. DP14048
Allen, F., E. Carletti, and J. Gray (2013). Political, fiscal and banking union in the Eurozone? Conference at the EUI in Florence.
Allen, F., T. Beck, E. Carletti, P. R. Lane, D. Schoenmaker and W. Wagner (2011). Cross-border banking in Europe: Implications for financial stability and macroeconomic policies. www.voxeu.org.
Beck, T. (ed.) (2012). Banking union for Europe – Risks and challenges. VoxEU eBook.
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Hills, R., D. Reinhardt, R. Sowerbutts and T. Wieladek (2016). Cross-border regulatory spillovers: How much? How important? What sectors? Lessons from the United Kingdom. BoE Staff Working Paper No. 595.
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