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In February 2022, the European Commission proposed a draft directive on corporate sustainability due diligence, to introduce mandatory due diligence on human rights and environmental criteria, and directors' duty of care. Parliament has long advocated binding EU legislation on this issue, not least in a 2021 resolution. In March 2023, the Committee on Legal Affairs adopted its report on the proposal, calling for a number of changes. The report will be debated during the May II 2023 plenary session ...

The Bank Crisis Management and Deposit Insurance (CMDI) framework should be enhanced with a view to completing the Banking Union. This study recommends harmonizing some key elements of the national bank insolvency regimes, granting the ECB a role in the provision of ELA and introducing improvements to the deposit guarantee schemes framework that could pave the way for the establishment of EDIS in the near future.

Analysing a set of RRF measures proposed by four MSs under pillar 3, we address several questions: how successful was the facility in pushing for long-awaited economic reforms in these countries? To what extent are the proposed measures tackling identified challenges in a number of policy areas? How adequate are the corresponding milestones and targets for ensuring effective implementation? We conclude that the facility was effective in bringing important reforms to the policy agenda, but there is ...

In July 2021, the European Commission tabled a proposal to establish a new EU authority to counter money laundering and the financing of terrorism (AMLA). This was part of a legislative package aimed at implementing the 2020 action plan for a comprehensive Union policy on preventing money laundering and the financing of terrorism. The AMLA would be the centre of an integrated system composed of the authority itself and the national authorities with an AML/CFT supervisory mandate. It would also support ...

This study analyses the key elements for the review of the existing EU bank crisis management and deposit insurance (CMDI) framework, including the recent (April 2023) legislative proposals tabled by the Commission, and the need to – finally – reach political consensus on the creation of a European Deposit Insurance Scheme (EDIS).

An important gap in the EU Banking Union architecture is the absence of a clear and uniform regulatory framework for the crisis management of small- and medium-sized banks. The authors argue that, taking stock from the US experience, a limited number of revisions to the current legal framework would be sufficient to establish a “standard proceeding” favoring alternative interventions by DGSs.

The argument for applying borrower-based measures (BBMs) to non-banks to make these institutions more resilient is weaker than in the case of banks, as non-bank failures create fewer negative externalities. At the same time, the implications of extending the scope of BBMs to non-banks for income and wealth distributions may be more negative, as this would leave younger and poorer households with no options to obtain housing finance. Therefore, it is not obvious that countries that apply BBMs to banks ...

This in-depth analysis covers the pending challenges of Europe’s bank crisis management framework, with special emphasis on small and medium-sized banks. It focuses on “transfer strategies” for selling failed banks, the framework of funding by deposit guarantee schemes (DGS) and resolution funds, the ranking of deposits to facilitate such transfers, and the need to address banking groups’ challenges.

This position paper argues that the macroprudential policy framework should include the non-bank financial sector. As this sector is much more diverse than the banking sector, applying macroprudential instruments to non-banks is not the way forward. Instead, appropriate stress-testing that takes the interconnected nature of the sector into account in combination with proper microprudential regulation is more desirable. This approach is illustrated for the case of money market funds in the EU.

The second Markets in Financial Instruments Directive (MiFID II) and the Markets in Financial Instruments Regulation (MiFIR) are the principal texts regulating investment services and financial markets activities in the EU. Following an extensive consultation and in light of the recent developments in the context of the coronavirus pandemic, the European Commission proposed the establishment of an EU-wide consolidated tape for financial markets instruments, as well as making targeted changes to market ...