The course will be organized around the relationship between market integration and policy integration for European financial services. In Europe, financial market integration has been much more rapid than policy integration. Financial prudential regulation has long been a subject of EU competence but with many caveats and also financial supervision and financial crisis resolution remained purely national prerogatives. This situation was even true in the euro area where the single currency resulted in even greater market integration than in the EU in general, yet financial stability policy was no more integrated there than in the EU. As a result both the EU in general and the euro area in particular were ill-prepared to both deal with the financial crisis and to exit from it. The crisis has been a catalyst for change, with new European policies and institutions to improve financial stability, including a banking union with three pillars – a Single Rule Book, a Single Supervisory Mechanism and a Single Resolution Mechanism – that have been politically agreed and started to operate in 2014 and 2015.
These three pillars will be analyzed from both a micro- and a macro-prudential angle, and will be compared to the situation in other jurisdictions, in particular the USA and some Asian countries. With respect to the Single Rule Book, the course will in particular look at the risk-based single rulebook for financial institution (namely Basel3 and Solvency 2 guidelines), and at those regulatory initiatives that have made market integration easier and closer to citizens (namely SEPA and other initiatives in the retail payment area such as a greater harmonization of deposit guarantee regimes). For the Single Supervision Mechanism, the course will cover both micro- and macro-prudential issues.
Finally, for the Single Resolution Mechanism, the course will look e.g. at preventive (possibly differentiated per type of institution) and early intervention measures. The course will also look at other initiatives that are being pursued both to deepen the Banking Union (eg the discussion on the European Deposit Insurance Scheme) and to enlarge it both geographically and beyond banks (in particular the Capital Markets Union and the European Fund for Strategic Investments (EFSI) initiatives. The ambition of the course is to look, with an open and critical attitude, at both the issues that have already been addressed and those that are still pending.