Bezpieczny Bank

The aim of this article is to identify and analyze major weaknesses of the precrisis supervisory and regulatory architecture of the U.S. financial market. The main thesis emerging is that weakening the role of this architecture since 1970s has translated into a significant catalyst of the world financial crisis of 2007+. The article is divided into 4 sections. Section 1 focuses on the problem of dispersion of supervisory institutions (as well as inefficiencies of their coordination) and on the issue of regulatory outsourcing. The next section concerns the process of successive erosion of standards in the U.S. banks’ credit policy, resulting from deregulation of the financial market. Both arguments for and against the deregulation are presented. Section 3 presents the phenomenon of the U.S. “revolving door”, which pertains to conflicts of interests in functioning of the regulators and supervisors. Last, but not least, in
section 4 the reader may find implications for financial market regulation and supervision resulting from the model of financing political campaigns.

The last financial crisis unveiled many regulatory and supervisory gaps. In the European Union, the provisions of Directives 2006/48/EC and 2006/49/EC proved to be flawed, particularly the wide range of national options and discretions, which led to a diversified regulatory environment. Furthermore, the organization of the financial supervision, especially banking supervision, was not adjusted to the dynamic changes occurring in the financial system. In order to address identified weaknesses, steps have been taken at the EU level. The article focuses on two main aspects. First, it presents tasks and competences of the European Banking Authority established as a part of reformed European supervisory architecture. Second, the article discusses reasons for the departure from the minimum harmonization principle to the benefit of the maximum harmonization as well as the reduction of national options and discretions in the CRDIV/CRR. The changes presented in the article indicate that there is pursuit of single banking supervision in the EU. 

Overseeing the stability of credit institutions should be preventive, since correct identification of risk and the degree of sensitivity to changes in the banking sector is essential to maintain the desired result. Thus, in the context of higher uncertainty in the credit institutions sector, the Basel Committee on Banking Supervision decided to update the guidelines on the role of internal audit function in banks. The document indicates that the internal audit should evaluate the modeling process, in particular the approval and maintenance of risk models including verification of consistency, timeliness, independence and reliability of data sources used in such models. It results from the fact that credit institutions are using model solutions for the management of the credit portfolio quality as well as the calculation of the economic and regulatory capital. Therefore, the results of the appropriately performed audits of the design, development, implementation and validation of the risk measurement models enables to assess the effectiveness of bank management. Thus, the audit results of the modeling process allow to assess the stability of credit institutions.

In this paper we discuss potential prerequisites for change in the credit risk assessment paradigm. Many of the past practices, theories, and procedures concerning risk modeling, failed and moreover resulted in series of bankrupted banks and companies. Many papers were written about the causes and foundations of these turbulences in the banking sector, but very few of them studied the impact of the credit risk assessment paradigm. We claim that many components of the currently applied paradigm do not fit the conditions in the economic environment. High frequency financial and capital markets associated with amassing scale of
businesses and economic activities cannot be safely driven by increasing regulatory rule anymore. We think that the excess of regulations not only removes vigorous progress from the credit risk management ideas and concepts, but even worse, disables and deactivates well created paradigms, which, in turn, makes it impossibleto recognize the real deficiencies within the paradigm itself.

In the economically developed world, in 2008 the banking system fell into a serious crisis. In response to this situation, regulators and central banks have focused on building a more stable banking system for the future through better aeverage. The system was supposed to be more fluid and better supervised.

The outlook for the financial services industry is closely linked to the macroeconomic outlook for the UK. Financial services for businesses and consumers have a significant effect on the changes in the economy. In difficult economic times, many households have lower incomes and their personal finances shrink under the influence of macro-economic changes, such as fiscal consolidation and higher inflation.

The purpose of this article is to review the decision of the bank of England, and their impact on the housing market in the UK that are more relevant to consumers.

The Single Euro Payments Area (SEPA) is a project, the implementation of which contributes to a more complete financial integration of the European Union countries. SEPA applies to financial services: credit transfers, direct debits and payment cards area (Chip & PIN). The existing migrations of the Member States in this area are regarded as insufficient. Therefore it is worth to underline the
involvement of the European Parliament, that adopted the Regulation 26/2012. This regulation states: a) the date of migration for countries of the euro area is year 2014; b) the date of migration for countries outside of the euro area is year 2016. The aim of this article is to analyze the current status of SEPA migration for EU countries and to identify the sources of this process acceleration in the next year.