TY - RPRT A1 - Mack, Sebastian T1 - Beyond transparency: Getting serious about greening Europe’s financial system N2 - The financial sector must divest from unsustainable business. This is imperative to achieve a climate-neutral economy and to safeguard financial stability. The European sustainable finance regulatory agenda of 2018 launched important initiatives that increase transparency on climate risks. Now it is time to move to the second stage and incorporate climate risks in the risk models and capital requirements of banks, pensions funds and insurance firms. This will reduce their exposure to potential losses from climate risks and at the same time render sustainable investment alternatives more attractive. Y1 - 2021 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-37334 U6 - https://doi.org/10.48462/opus4-3733 ER - TY - RPRT A1 - Mack, Sebastian T1 - The final piece of the Basel III jigsaw fits - Banks and unrated corporates can handle the output floor N2 - The European Commission has proposed implementing the outstanding elements of the international banking reforms agreed in the wake of the global financial crisis. The final Basel III rules are designed to curb any underestimating of risks by banks when using internal models. The introduction of the output floor as lower bound for determining banks’ capital requirements will foster fair competition between banks using internal models and those that do not. The output floor will predominantly affect loans to large unrated corporates. Sebastian Mack assumes that the resulting capital increase will be digestible for the banks with only limited effects on the real economy. Requiring all EU corporates to seek an external credit rating would not reduce the impact of the output floor as only a fraction of these firms demonstrates high creditworthiness. However, increasing the rating coverage of EU corporates would provide banks with additional information on borrowers and thus improve their risk management capabilities. In the absence of any public European rating agency, national central banks should follow the example of the Banque de France and establish public rating registers for large EU corporates. KW - Basel 3; unrated corporates; banking reforms Y1 - 2021 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-42510 UR - https://www.delorscentre.eu/en/publications/detail/publication/output-floor ER - TY - RPRT A1 - Mack, Sebastian A1 - Guttenberg, Lucas T1 - After the German election: What's next in EU economic governance? N2 - The new German government will face a number of unresolved issues of varying urgency when it comes to EU economic governance. In the case of the fiscal rules, there is an urgent need for a decision on how to proceed after 2022. In the medium term, the future of EU finances and economic policy coordination is open; both have undergone drastic changes as a result of the Recovery Instrument. Last but not least, the new German government must decide whether and how to break the deadlock in negotiations on completing the banking union and breathe new life into the capital markets union. KW - German 2021 elections; economic governance Y1 - 2021 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-42434 UR - https://www.delorscentre.eu/en/publications/detail/publication/what-next-in-european-fiscal-politics ER - TY - RPRT A1 - Mack, Sebastian T1 - Never waste a good crisis: European banking regulation in the pandemic N2 - The regulatory framework for banks introduced in the aftermath of the global financial crisis was designed to provide financial stability in good and bad times. Given an external shock, capital buffers are meant to cushion losses and prevent banks from pro-cyclical deleveraging. However, insufficient accumulation of easily releasable buffers ahead of the pandemic, combined with banks‘ unwillingness to use the available ones, made European decision-makers tweak hard banking law during the pandemic. In his policy brief, Sebastian Mack shows that microprudential, monetary and fiscal policy measures together averted a credit crunch. But Europe should revise its macroprudential framework so that it is fully functional in the next crisis. KW - banking regulation; pandemic Y1 - 2021 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-42474 UR - https://www.delorscentre.eu/en/publications/detail/publication/never-waste-a-good-crisis ER - TY - RPRT A1 - Mack, Sebastian T1 - Don’t change horses in midstream – How to make NGEU bonds the euro area’s safe asset N2 - The bonds financing the European Union’s recovery remain short of being the much-hoped-for safe asset of EU monetary union (EMU). However, with the right reforms they could well turn out to be just that. To earn safe asset status, the volume of EU debt should increase, EU borrowing made permanent, and the ECB treat supranational EU bonds in a more favourable manner. The flaws associated with failing to be a eurozone-only instrument are offset by remarkable fiscal and democratic benefits. So, if the NextGenerationEU (NGEU) pilot project – limited in time and tailored specifically to fighting the coronavirus pandemic – turns out to be to everybody’s benefit, then member states should seize the opportunity and extend it before debt is repaid as of 2028. Y1 - 2021 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-42361 UR - https://www.delorscentre.eu/en/publications/detail/publication/safe-asset ER - TY - RPRT A1 - Mack, Sebastian T1 - Big tech: Closing the blind spot in Europe's financial market rules N2 - The technology giants Google, Apple, Facebook, Amazon and Microsoft are on the rise, recently also in the financial services business. This poses new challenges not only for competition regulators and consumer protection agencies, but also for financial market supervisors. The European financial market rules have a blind spot with regard to big tech and this endangers financial market stability. To prevent technology giants from flying under the radar of financial supervision, Sebastian Mack argues in this policy position for making group supervision of financial conglomerates fit for the digital age. Y1 - 2021 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-42377 UR - https://www.delorscentre.eu/en/publications/detail/publication/big-tech ER - TY - RPRT A1 - Mack, Sebastian T1 - Beyond Wirecard - All of Europe needs independent financial supervisors N2 - Financial supervisory authorities in the EU are not sufficiently independent of political and economic influence. As the financial scandal surrounding Wirecard shows, this entails the risks of conflicts of interest that undermine the integrity of the European financial system and harm the goal of an integrated banking and capital markets union. That is why in his Policy Brief, Sebastian Mack proposes European-wide requirements for the independence, accountability and transparency of national financial regulators. Ten years after the establishment of the European System of Financial Supervision, it is high time to regulate the governance of national supervisory authorities across Europe and thereby strengthen financial supervision throughout the EU. Y1 - 2021 UR - https://www.delorscentre.eu/en/publications/detail/publication/beyond-wirecard ER -