Banking laws of member states of the EU are constantly reviewed by the laws and policies of the EU directed towards a unified market for financial services in the areas of banking, insurance and investment. Beginning with the First Banking Directive of 1977 which allowed banks to set up branches in member states, the Second Banking Directive 1989 provided for minimum capital requirements and procedures for home country regulators to control branches of financial institutions in other Member states. An EU 1985 White Paper proposed a single market in financial services effective 1992, and suggested harmonisation of key standards, movement of capital; joint coordination activities by regulatory agencies; home country control of businesses where the head office is located. The Banking Consolidation Directive covers credit and financial institutions just as the European Passport provides for services that could be done by a business concern in other states upon an approval by the home country authority. Banks therefore could operate in any part of the EU without approval of regulators in each country with the European passport or single licence concept upon a licence or authorisation by home country. The problem with a single approval or authorisation is that it may be difficult for the home state to monitor compliance as standards cannot be uniform throughout the EU. Though a single market principle demands that businesses should be able to operate anywhere in the community without hurdles or barriers, standards must be maintained especially in banking issues as each state’s case may specifically present peculiar needs. Capital adequacy directive for banks and investment firms was to ensure the liquidity and viabili... ... middle of paper ... ...tionalistic inclinations in some member states due to lack of adequate monitoring and reports by aggrieved parties. It is expected that the EUwould be more vocal in ensuring that its rules are enforced and complied with by the Member states. Works Cited E.P. Ellinger, E. Lomnicka, R.J.A Hooley, Ellinger’s Modern Banking Law, Fourth Edition, OUP, Oxford, 2006, page 53. Relying on the European Court of Justice interpretation on movement of goods in Cassis de Dijon Case 120/78 (1979) ECR 649 and Coditel Case 262/81[1982] ECR 3381 Directive 2000/12/EC E.P. Ellinger, E. Lomnicka, R.J.A Hooley, Ellinger’s Modern Banking Law at page 56 Capital Adequacy Directive 93/6 [1993] OJ LI41/1 Directive 94/19EEC[1994] OJ LI 35/5 http://www.finance.yahoo.com/news/Why-the Irish-Crisis-Going-usnews-4028366968.html?x=0 http://www.euromove.org.uk
To answer this question I will firstly explain how EU law became incorporated within the member states I will then explain the various types of EU legislation's in circulation. This is important to define as the various types of methods will involve different enforcement procedures. Finally I will explain how EU law is enforced and the ways EU law will effect the member state and individual businesses. I will summarise my findings at the end of the essay, this will give details of all the key ideas I have ut across.
Eccles, George. The Politics of Banking. Salt Lake City : University of Utah Press, 1982
Laughlin, J.L. (1914). The Banking and Currency Act of 1913: 1. The Journal of Political Economy, 22(4), 293-318.
Globally, banks have been facing big challenges in the last few years and continue to do so. As a result of the financial crisis, the regulators have tightened the minimum capital requirements with the aims to create a more solid and shock-resistant banking system especially for the so called Global Systemically Important Banks (G-SIBs). The Financial Stability Board is expecting to raise the total loss-absorbing capacity
When analysts criticise the lack of democratic legitimacy in the EU they generally point to the mode of political representation and the nature of policy outputs. Only one branch of the EU is directly elected is the European Parliament. Though stronger than it once was, the EP remains is actually only one of four major actors in the EU policy-making process. The EP is a body without power or accountability, and easily dismissed just as a ‘talking shop’ (Colin Pilkington.) Only 75% of its amendments are accepted by the Commission and the Council of Ministers.
...: Reassessing Legitimacy in the European Union. Journal of Common Market Studies, 40 (4), pp. 603-24.
There is a vast amount of literature available on the additional procyclicality of regulatory capital charges in Pillar 1 of Basel II. In this section, we shall briefly visit this literature and see if any conclusions can be drawn from this, before proceeding to the conclusion and mitigation of these procyclical effects. The majority of the literature, as expected, focuses primarily on the IRB approach, as this aspect of Basel II has drawn the most criticism from financial practitioners and academics alike. The greater part of this literature has found that there is an overwhelmingly substantial rise in procyclicality of minimum regulatory capital charges originating from the IRB approach. Gordy and Howells found that under the IRB approach, volatility in the capital charge, relative to the mean, is between 0.1 to 0.26 (Gordy & Howells, 2004). This follows another study by Kashyap and Stein, which shows that capital charges rose by 70-90% during the years of 1998 to 2002 dependant of the model used to calculate PD’s (Goodhart & Taylor, 2004).
...ence of Capital Measurement and Capital Standards’, Basle Committee on Banking Supervision, vol.1, no.1, p1-28.
Binhammer, H. H. & Peter S. Sephton. Money, Banking and the Financial System. Nelson, 2001.
The European Communities Act provides that s 2(1) has direct effect of EU law provisions which suggests EU law regulations are automatically binding upon parliament without the need of creating new ...
Howells, Peter., Bain, Keith 2000, Financial Markets and Institutions, 3rd edn, Henry King Ltd., Great Britain.
“From time to time it is worth reminding ourselves why twenty-seven European nation states have come together voluntarily to form the partnership that is the European Union.” 1
International financial transactions take place between varieties of jurisdictions which may belong to any of the existing legal families. Each legal family emerging in their own ways, with their respective philosophies are bound to have differences. For the purpose of this essay we shall look at whether in the current legal environment, in the context of set-off and netting do these differences matter or not and in case of any differences, if they are only based on terminology.
Weiler, Joseph H.H.: «Community, Member States and European Integration: Is the Law Relevant?», Journal of Common Market Studies 21 (1982), pp. 39-56.
Do capitalized bank is contribute more on bank performance compare to other variables? Did relationships between determinants of banks’ profitability change during the financial crisis? This study therefore, intends to examine the bank specific and macro determinants on banks’ profitability, the impact capital and financial crisis on banks profit. To answer the research questions, the dissertation selected 27 commercial banks in Malaysia including local and foreign banks to fill this gap.