Fine-tuning the use of bail-in to promote a stronger EU financial system. CEPS Special Report No. 136/April 2016

This paper discusses the application of the new European rules for burden-sharing and bail-in in the banking sector, in view of their ability to accommodate broader policy goals of aggregate financial stability. It finds that the Treaty principles and the new discipline of state aid and the restructuring of banks provide a solid framework for combating moral hazard and removing incentives that encourage excessive risk-taking by bankers. However, the application of the new rules may have become excessively attentive to the case-by-case evaluation of individual institutions, while perhaps losing sight of the aggregate policy needs of the banking system. Indeed, in this first phase of the banking union, while large segments of the EU banking sector still require a substantial restructuring and recapitalisation, the market may not be able to provide all the needed resources in the current environment of depressed profitability and low growth. Thus, a systemic market failure may be making the problem impossible to fix without resorting to temporary public support. But the risk of large write-offs of capital instruments due to burden-sharing and bail-in may represent an insurmountable obstacle to such public support as it may set in motion an investors’ flight. The paper concludes by showing that existing rules do contain the flexibility required to accommodate aggregate policy requirements in the general interest, and outlines a public support scheme for the precautionary recapitalisation of solvent banks that would be compliant with EU law.

1980 Annual Status Report: Training and Education (Multiannual Programme of the Joint Research Centre 1980-1983). EUR 7261 EN, 1981

The Education and Training Programme has been set up in recognition of the growing importance of continuing education in modern technological society. It is designed to improve the dissemination of scientific and technical knowledge in subjects related to the research activities of the JRC, to the potential external users: industries, public bodies, research and educational organizations, etc. . . Moreover, owing to the number and the quality of specialists of the various fields covered by the courses who are brought to Ispra as lecturers or participants, this programme plays an important role in the integration of the research teams of the JRC with the European scientific world, and in. the development of contacts and ties between European scientists active in a given field.