Stability & Supervision | Finance Watch

Policy portal Stability & Supervision

When trust in the financial system disappears, panic sets in: fire sales of financial assets and bank runs can make the entire system collapse. Taxpayers are forced to bail out “too-big-to-fail” institutions to protect essential economic functions (deposits, credit, payment systems).

Mitigating implicit “moral hazard” requires sound prudential policies protecting essential banking services from excessive risk-taking and maintaining adequate capital levels to cover possible losses. Well-resourced, and independent supervision is also key. Finally, prudential regulation must also respond to new risks related to digitalisation (see “Digital Finance”) and climate change (see climate risk under “Sustainable Finance”).

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2 PUBLICATIONS

Consultation response

28/04/2025

Stability & Supervision

Response to Commission consultation on the market risk prudential framework
Open letter

12/12/2012

Stability & Supervision

Open letter to Pierre Moscovici on French banking reform

In an open letter sent yesterday to the French finance Minister, Pierre Moscovici,Finance Watch warns that the draft bank reform would fail to deliver President Hollande’s pledge to separate the credit activities of...
Position paper

29/10/2012

Stability & Supervision

Bank structures and Banking Union: Presentation at Finethikon

Presentation by Finance Watch Secretary General Thierry Philipponnat at the Third Congress on Finance Ethics, the “Finethikon”, 26 October 2012, about the problems of moral hazard and banking structure in repation to EU plans...

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The blog corner

Stability & Supervision

Level:Regular

19.06.2025

Europe cannot sacrifice financial regulation to Trump’s economic warfare

Stability & Supervision

Level:Regular

05.06.2025

More risk, no reward? The strange revival of securitisation

Stability & Supervision

Level:Beginner

09.04.2025

The stage is being set for another financial crisis
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