Transcript Slajd 1 - Bankowy Fundusz Gwarancyjny

Introductory remarks
European legislative initiatives
Jerzy Pruski
Bank Guarantee Fund
Poland
EFDI - IADI Conference Strengthening Financial Stability – Deposit Insurance Contributions
Rome, 1 October 2010
1
European Union
Risk areas
2
Risk sources - main areas
Broad range of benefits of
globalisation
Global economy
• Insufficient information
• Crisis contagion
Limiting risk requires actions in three areas:
1)
2)
3)
domestic markets
cross-border issues
large financial institutions
3
Harmonization and common EU financial stability rules
European initiatives
Domestic markets
Basel III
DGS Directive
Resolution funds
Area not addressed
Cross-border issues
EU institutions, e.g.:
ECB - European Central Bank
ESRB - European Systemic Risk Board
EBA - European Banking Authority
Large financial institutions
Assets transfer
„Living wills”
Cooperation
4
European Union
Large banks perspective
5
Banking sector size and concentration
Banking sector size to GDP (% )
Netherlands
UK
478
Germany
373
France
- banking sector asset size
360
Belgium
- proportion of potential risk to banking sector asset size
354
Ireland
329
Spain
- proportion of potential risk to GDP in different states
312
Italy
168
Poland
75
0
100
200
300
400
%
500
Assets of the largest bank group to GDP
Assets of 3 largest banking groups to GDP
350%
Differentiations
502
332%
325%
Assets of the largest bank group to banking sector balance sheet total
Assets of 3 largest banking groups to banking sector balance sheet total
90%
82%
309%
80%
300%
269%
68%
70%
243%
250%
203%
65%
65%
64%
63%
60%
200%
170%
158%
50%
46%
150%
107%
120%
91%
100%
108%
109%
38%
40%
121%
36%
30%
43%
28%
16%
39%
39%
20%
35%
28%
25%
15%
Sources: ECB, Banks Annual Reports (2009), „Credit Writedowns” (June 2010), „The Forbes Global 2000” ranking (2010)
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10%
0%
Po
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17%
29%
G
12%
27%
26%
66%
Po
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nd
50%
63%
39%
33%
95%
6
Banking sector size and concentration
in relation to country fiscal position
Assets of 3 largest banks, deficit and debt (% of GDP)
400%
Assets of 3
largest banks
(% of GDP)
350%
Netherlands
UK
Banking
sector size
400%
Debt growth
(2010 forecast)
350%
Belgium
300%
Netherlands
300%
UK
Belgium
Ireland
Ireland
250%
Banking
sector size
Deficit
growth/fall
(2010 forecast)
Assets of 3
largest banks
(% of GDP)
-1
250%
France
France
200%
200%
Spain
Spain
150%
150%
Italy
Germany
100%
Poland
50%
Public debt (2009, % GDP)
0%
50
60
70
80
90
Italy
50%
USA
40
Germany
100%
100
110
120
Poland
USA
Government deficit (2009, % GDP)
0%
0
2
4
6
8
Sources: ECB, Banks Annual Reports (2009), „Credit Writedowns” (June 2010), „The Forbes Global 2000” ranking (2010)
10
12
14
16
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Banking sector size and concentration
in relation to country fiscal position
Assets of the largest bank, deficit and debt (% of GDP)
Banking
sector size
250% Assets of the
largest bank
(% of GDP)
Banking
sector size
Deficit
growth/fall
(2010 forecast)
Assets of the
largest bank
(% of GDP)
Debt growth
(2010 forecast)
Netherlands
200%
250%
Netherlands
200%
Belgium
Belgium
150%
150%
UK
100%
Spain
UK
France
Ireland
France
100%
Ireland
Spain
Italy
Germany
50%
Germany
Italy
50%
Poland
Poland
USA
USA
Public debt (2009, % GDP)
0%
40
50
60
70
80
90
100
110
120
Government deficit (2009, % GDP)
0%
0
2
4
6
8
Sources: ECB, Banks Annual Reports (2009), „Credit Writedowns” (June 2010), „The Forbes Global 2000” ranking (2010)
10
12
14
16
8
Conclusion
Existing regulations and undertaken initiatives
Domestic markets
Problems partially addressed
Cross-border issues
Additional activities required
Large financial institutions
Area not addressed
Main challenge
Problem particular serious in Europe
Interventions in LFI carries the risk of sovereign debt default
Problematic fiscal position and extremely limited scope for
intervention in a distressed bank by individual country
Monetisation public debt :
- can not be applied by individual country
- unclear mandate for ECB
- European Financial Stability Facility
Vast asymmetry between actual benefits from Large Financial
Institutions and potential cost of resolution
9