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Safe Bank

Published: 2024-02-19

The new role of the European Central Bank in the financial security net

Aleksandra Nadolska , Wojciech Nadolski

Abstract

Fundamental changes in regulations of the financial safety net have been taking place in the European Union. They are intended to ensure safety and stability of the single financial market, a high level of protection of depositors and consumers of financial services, reducing the social costs of insolvency of credit institutions, and also reducing moral hazard by creating mechanisms for early response to irregularities in banks. These are the best reasons for changes made primarily in the European financial supervision architecture. While financial supervision is still an important link in the financial safety net, it is increasingly being entrusted to central banks, which in turn determines alone the treatment of central banks as key financial market institutions protecting against destabilisation. At the level of supranational institution, oversight responsible for exercising complex micro- and macro-prudential, is the European Central Bank. Thus, the merger of monetary policy and oversight in one institution has taken place. This did not modify the existing architecture of the EU financial supervision in structural terms. However this has led to the fact that the ECB has become a strategic element of the European financial safety net.

Vol. 57 No. 4 (2014)
Published: 2024-02-19


ISSN: 1429-2939
eISSN: 2544-7068
Ikona DOI 10.26354

Publisher
Bankowy Fundusz Gwarancyjny

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