Completing the Banking Union: Deposit Insurance. CEPS Policy Brief No. 335, 3 December 2015

It is generally agreed that a Banking Union should have common or ‘single’ institutions responsible for carrying out three basic functions: supervision, resolution and deposit insurance. So far, however, agreement has been reached in the EU on only the first two of these functions. The Commission has now presented its proposal on how to complete the Banking Union with a European Deposit Insurance Scheme (EDIS). It is an innovative and courageous proposal. It is courageous because it will clearly be very controversial in a number of member states (especially Germany) and it is innovative because it proposes a three-stage process, starting with re-insurance, then switching to co-insurance and finally to full direct insurance of deposits via a ‘single’ Deposit Insurance Fund (DIF). This final stage should be reached in 2024, which is also the date at which the Single Resolution Fund (SRF) will become the only source of financing for bank resolution. The Commission’s proposal calls for integrating the decision-making for EDIS into the decision-making entity for the SRF, namely the existing Single Resolution Board (SRB). This makes sense if one views resolution and deposit insurance as two highly interlinked dimensions of dealing with banks in trouble. In this view the two dimensions should be bundled into one institution – and one suspects that over time the two funds (the SRF and the DIF) could be merged into one. This Policy Brief argues that re-insurance should not be considered as a transitory phase, but could also provide a solution for the long run. ‘Experience rating’ could be used to ensure a proper pricing of risk and to protect the interests of the depositors in countries with safer banking systems. Moreover, EDIS should have a decision-making structure separate from and independent of the SRM, since it has mainly a macroeconomic function.

The Challenges of the EU Banking Union - will it succeed in dealing with the next financial crisis? Bruges European Economic Policy Briefings 36/2015

The EU Banking Union combines micro- and macro-prudential regulation. It aims at breaking the “doom loop” between banks and sovereign debt, promoting financial stability and mitigating the next financial shock to the real EU economy, at the lowest possible cost to the financial institutions and to the taxpayers. Success, or failure, is determined by how the banking union copes with the challenges to its two main pillars, the Single Supervisory Mechanism (SSM) and the Single Resolution Mechanism (SRM). Under the SSM, in its new supervisory role, the ECB may be subject to conflicts between the objectives of price and financial stability, and the single-supervisor role may be sub-optimal. Two regulators might have been preferable and more focus on ECB accountability will now be required. The shock-absorbing Single Resolution Fund (SRF), which is part of the SRM, may not have the capacity to deal with a crisis of the size of the one of 2008. Especially as the nature and severity of a future financial crisis cannot be forecasted. The design of the banking union is not the result of theoretical studies, but a political compromise to deal with an acute crisis. The theoretical studies that are included in this paper are not supportive of the banking union in its current form. Nevertheless, there is a good chance that the EU Banking Union may succeed, as ECB supervision of the 123 systemically important banks should contain potential demands on the SRM. In the event of a crisis that is too severe for the banking union to absorb with its current capability, the crucial assumption is that there is political will to rapidly provide new resources. The same applies, if a major financial crisis develops before the banking union is fully operational.

The Challenges of the EU Banking Union - will it succeed in dealing with the next financial crisis? Bruges European Economic Policy (BEEP) Briefings 36/2015

The EU Banking Union combines micro- and macro-prudential regulation. It aims at breaking the “doom loop” between banks and sovereign debt, promoting financial stability and mitigating the next financial shock to the real EU economy, at the lowest possible cost to the financial institutions and to the taxpayers. Success, or failure, is determined by how the banking union copes with the challenges to its two main pillars, the Single Supervisory Mechanism (SSM) and the Single Resolution Mechanism (SRM). Under the SSM, in its new supervisory role, the ECB may be subject to conflicts between the objectives of price and financial stability, and the single-supervisor role may be sub-optimal. Two regulators might have been preferable and more focus on ECB accountability will now be required. The shock-absorbing Single Resolution Fund (SRF), which is part of the SRM, may not have the capacity to deal with a crisis of the size of the one of 2008. Especially as the nature and severity of a future financial crisis cannot be forecasted. The design of the banking union is not the result of theoretical studies, but a political compromise to deal with an acute crisis. The theoretical studies that are included in this paper are not supportive of the banking union in its current form. Nevertheless, there is a good chance that the EU Banking Union may succeed, as ECB supervision of the 123 systemically important banks should contain potential demands on the SRM. In the event of a crisis that is too severe for the banking union to absorb with its current capability, the crucial assumption is that there is political will to rapidly provide new resources. The same applies, if a major financial crisis develops before the banking union is fully operational.

Field-based models for low speed switched reluctance machine designs

Trabalho apresentado na Conferência CPE-POWERENG 2016, 29 junho a 01 de julho 2016, Bydgoszcz, Polónia

The isotope composition of selenium in chondrites constrains the depletion mechanism of volatile elements in solar system materials

Solar nebula processes led to a depletion of volatile elements in different chondrite groups when compared to the bulk chemical composition of the solar system deduced from the Sun's photosphere. For moderately-volatile elements, this depletion primarily correlates with the element condensation temperature and is possibly caused by incomplete condensation from a hot solar nebula, evaporative loss from the precursor dust, and/or inherited from the interstellar medium. Element concentrations and interelement ratios of volatile elements do not provide a clear picture about responsible mechanisms. Here, the abundance and stable isotope composition of the moderately- to highly-volatile element Se are investigated in carbonaceous, ordinary, and enstatite chondrites to constrain the mechanism responsible for the depletion of volatile elements in planetary bodies of the inner solar system and to define a δ(82/78)Se value for the bulk solar system. The δ(82/78)Se of the studied chondrite falls are identical within their measurement uncertainties with a mean of −0.20±0.26‰ (2 s.d., n=14n=14, relative to NIST SRM 3149) despite Se abundance depletions of up to a factor of 2.5 with respect to the CI group. The absence of resolvable Se isotope fractionation rules out a kinetic Rayleigh-type incomplete condensation of Se from the hot solar nebula or partial kinetic evaporative loss on the precursor material and/or the parent bodies. The Se depletion, if acquired during partial condensation or evaporative loss, therefore must have occurred under near equilibrium conditions to prevent measurable isotope fractionation. Alternatively, the depletion and cooling of the nebula could have occurred simultaneously due to the continuous removal of gas and fine particles by the solar wind accompanied by the quantitative condensation of elements from the pre-depleted gas. In this scenario the condensation of elements does not require equilibrium conditions to avoid isotope fractionation. The results further suggest that the processes causing the high variability of Se concentrations and depletions in ordinary and enstatite chondrites did not involve any measurable isotope fractionation. Different degrees of element depletions and isotope fractionations of the moderately-volatile elements Zn, S, and Se in ordinary and enstatite chondrites indicate that their volatility is controlled by the thermal stabilities of their host phases and not by the condensation temperature under canonical nebular conditions.