Financial Regulation in the European Union After the Crisis

Domenica Tropeano is Associate Professor at the Department of Economics, Università di Macerata, Italy.

• Part 1 Chapter 1Minsky’s institutional analysis of the development of the economy and how financial regulation fits in it. System’s endogeneous dynamics versus institutions and interventions.Financial innovation as bricolage.Minsky on money manager capitalism, finance and thwarting systems.Chapter 2Recent proposals of change in financial regulation inspired by Minsky.Is the central bank the only circuit breaker left ?ConclusionsChapter 3Basel III: the revised capital requirements, the leverage ratio, and total loss absorbing capacity.IntroductionThe revised capital requirements. Just a change in the weights?How the revision in capital requirements should work in practice.Other macroprudential measures.The Leverage RatioThe definition of leverage ratio and how to calculate it.Too much hope in this new tool?Total loss absorbing capacity in the EU.ConclusionsChapter 4Two additional regulatory metrics: the Liquidity Coverage Ratio and the Net Stable Funding Ratio.The Liquidity Coverage Ratio.How to calculate the numerator of the ratio.How to calculate the denominator of the ratio.Conclusions about the theoretical underpinnings of the ratio.Eba’s studies on the application of the BCBS designed liquidity coverage ratio to the European Union banking system.The Net Stable Funding Ratio.How to calculate the net stable funding ratio.The treatment of derivatives in the NSFR and the discussion with industry representatives.What type of banking does the NSFR favor?ConclusionsChapter 5Main consequences of the interaction between new regulatory rules (risk weighted capital requirements, lev