Patrice Aguesse

Head of the Market Regulation Division, AMF, Paris

Roxana Damianov

Responsable de l’équipe Corporate Reporting, ESMA

Nadège Jassaud

Head of Resolution Strategy, Process, and Methodology Unit, Single Resolution Board (SRB), Brussels

Delphine Reymondon

Head of Capital and Asset/Liability Management Unit, European Resolution Authority (EBA), London

Régulation et Marchés Financiers

Les objectifs du cours

In 2008, the G20 committed to fundamental reform of the global financial system to address the major fault lines that caused the crisis. Banks, particularly in the US originated a large volume of credits to low quality borrowers. Those credits were re-distributed widely to the whole financial system, through securitization. The opaqueness of the securitized market added to the stress and prevented regulators from pinpointing the risks. Against this background, the G20 countries committed to enlarge the scope of regulation to all players and markets, including credit rating agencies, derivatives and hedge funds. For the first time, no market and no market instrument would escape oversight. Banking regulation has been strengthened, with the Basel III package of reforms being its centrepiece. Full, timely and consistent implementation of Basel III is fundamental to a sound and properly functioning banking system that is able to support economic recovery and growth on a sustainable basis.The supervisory architecture has also been reshuffled with a Financial Stability Committee being set up.

This lecture aims at giving the students an overview of recent and future regulatory reforms, both on the bank and market sides.

Plan du cours

I - Reforming the Regulatory and Supervisory Architecture [1.5 hours]

  • Financial Stability Board;
  • Reshuffled European Architecture: A Single Rule Book, ESAs

II - Building resilient financial institutions : The Basel III Package/ CRR-CRD-IV [6 hours]

  • Banking Union and role of the EBA
  • New Capital Rules
  • Finalized Standard for the Leverage Ratio.
  • Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR).

III - Ending too-big-to-fail [6 hours]

  • EU Framework and the Single Resolution Mechanism
  • Total Loss-Absorbing Capacity (TLAC) and its EU implementation (MREL)
  • Recovery and Resolution
  • Structural Reforms: Where do we Stand?

IV - Making over-the-counter (OTC) derivatives markets safer [4.5 hours]

  • Implementation of OTC derivatives market reforms
  • Central counterparties

V - The new EU Security Legal Framework [3 hours]

  • Equity Markets
  • Bond Markets
     

Bibliographie

BCBS (2011), Basel III: A global regulatory framework for more resilient banks and banking systems
Ben Bernanke, “Some Reflections on the Crisis and the Policy Response”
EBA (2015), Annual Report
FSB (2015), Annual Report
FSB (2014), Key Attributes of Effective Resolution Regimes for Financial Institutions
IMF (2012), From Bail-out to Bail-in: Mandatory Debt Restructuring of Systemic Financial Institutions
IMF (2016), Global Financial Stability Review
IMF, (2016), Article IV Euroarea
IMF, (2013), R. Goyal, P. Koeva Brooks, M. Pradhan, T. Tressel, G. Dell’Ariccia, R. Leckow, C. Pazarbasioglu, “A Banking Union for the Euro Area,” IMF Staff Discussion Note, February
Tarullo D., (2012), “Regulatory Reform since the Financial Crisis”
Vinãls, J.; Pazarbasioglu, C.; Surti, J.; Narain, A.; Erbenova, M.; Chow, J., (2013), “Creating a Safer Financial System: Will the Volcker, Vickers, and Liikanen Structural Measures Help?”

Examen

Group of students (3) will present a topic for 15 minutes. They will send their slides two days in advance (60% of the total mark). 

Slides Presentation (50%), participation (25%), final exam (12%)