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Bank bonus compromise bodes ill for the Single Supervisory Mechanism. CEPS Commentary, 8 March 2013

Lannoo, Karel. (2013) Bank bonus compromise bodes ill for the Single Supervisory Mechanism. CEPS Commentary, 8 March 2013. [Policy Paper]

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    Abstract

    The European Parliament has probably won a Pyrrhic victory with its position on bank bonuses, argues CEPS CEO Karel Lannoo in this new Commentary. In return, EU member states got what they wanted with the new Capital Requirements Directive (CRD IV): no binding leverage ratio; mortgage risk weightings and capital add-ons to be determined by member states; and no obligatory consolidated capital position for bank-insurance companies. In other words, Banking Union will start out with capital rules that are more like Emmental cheese than a single rulebook. This is a huge encumbrance for a well-functioning Single Supervisory Mechanism (SSM), and makes a single resolution mechanism impossible.

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    Item Type: Policy Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > Single Market > capital, goods, services, workers
    EU policies and themes > Policies & related activities > economic and financial affairs > financial crisis 2008-on/reforms/economic governance
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Commentaries
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 13 Mar 2013 09:21
    Number of Pages: 2
    Last Modified: 13 Mar 2013 09:21
    URI: http://aei.pitt.edu/id/eprint/40911

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