Arthur van den Hurk, Michele SiriFrom: Governance of Financial Institutions
Edited By: Danny Busch, Guido Ferrarini, Gerard van Solinge
This chapter focuses on corporate governance in the insurance sector. Insurers fulfil an essential role in the economy as managers of insurable risk over potentially long periods of time. This role requires a corporate culture and environment of shared values and respect of sound ethical principles. Overall, this is a system which is composed of corporate structures and related governing policies. EU prudential regulation has to deal with the specificities of the insurance sector and to have sufficient flexibility to take into account the characteristics of each type of insurance activity and various forms of corporate structure. There are also expectations to shape corporate governance frameworks of financial institutions in a comparable and similar way for all types of financial institutions, often using banking regulation as the underlying template.
Part IV The European Deposit Insurance System and Policy Perspectives, 17 Financial Conglomerates in the European Banking Union »
Arthur van den Hurk, Michele SiriFrom: European Banking Union (2nd Edition)
Edited By: Danny Busch, Guido Ferrarini
This chapter discusses the position of financial conglomerates within the European banking union. Financial conglomerates are typically large and complex groups that combine banking and/or investment activities with other regulated and/or unregulated activities and usually operate across borders. The fact that their activities are not limited to banking activities raises interesting but a complicated question with respect to their regulation and supervision as conglomerates, in addition to the sectoral regulation and supervision these groups and the individual entities in these groups operate under. The background and evolution of financial conglomerates and conglomerate supervision are discussed, as well as the manner in which it is embedded in financial supervision in Europe. Furthermore, the evolution of the sectoral group and consolidated supervision is discussed, including the inception of the Single Supervisory Mechanism (SSM) and the challenges of supervision under the SSM. An additional layer of complexity is formed by the requirements that apply to resolution. The chapter concludes by reflecting on the complex interaction between the different sectoral frameworks, difference and inconsistencies between frameworks, specificities of the various sectors, and the need for a thorough assessment of the requirements that apply to conglomerates and their interaction.
Matteo Gargantini, Michele SiriFrom: Financial Market Infrastructures: Law and Regulation
Edited By: Jens-Hinrich Binder, Paolo Saguato
This chapter examines the regulation of stock and derivatives exchanges in the European Union. Based on a theoretical analysis of exchanges as transaction platforms, it identifies three major economic functions: listing, trading, and data vending. The chapter explores each of these functions separately. As for listing, it highlights the distinction between admission to listing and admission to trading in the European Union, as well as the role of regulated markets’ potential conflicts of interest on that function. As for trading, the chapter explores some key provisions that contribute to creating liquidity, including those concerning market makers, tick sizes, trading obligations, and best execution. It also addresses the regulatory framework on algorithmic and high-frequency trading. As for data vending, the chapter discusses the pre- and post-trade transparency requirements, and the price regulation of market data. Finally, the chapter analyses the determinants of stock and derivatives exchange governance.