The Regulation of Megabanks: Legal frameworks of the USA and EU

G-SIBs are the largest, most complex, and most threatening banking institutions in the world. The Global Financial Crisis (GFC) was a turning point for G-SIBs, revealing flaws and omissions in the legal framework applying to financial entities. Since the GFC, legal systems have changed, and global and national lawmakers have adopted new rules to reduce their threat to financial stability. This book explores whether the G-SIB-specific regulatory frameworks are adequately tailored to their individualism to prevent them from exploiting overly general rules. It also discusses transformation of banking systems and the challenges and opportunities G-SIBs face, such as Big Tech competitors, climate-related requirements, and the COVID-19 pandemic.

Format: Hardback
Length: 232 pages
Publication date: 22 November 2022
Publisher: Taylor & Francis Ltd

The world's largest, most complex, and most threatening banking institutions are known as global systemically important banks (G-SIBs). Many of these banks played a significant role in the onset and severity of the Global Financial Crisis (GFC), which marked a turning point for G-SIBs. The GFC also exposed weaknesses and gaps in the legal framework governing financial entities. In the case of G-SIBs, it became evident that the legal regimes in both the United States and the European Union failed to adequately recognize the unique characteristics of these institutions, their systemic importance, complexity, and individualism. As a result, these megabanks were often treated as ordinary smaller banking institutions.

Since the GFC, legal systems on both sides of the Atlantic have undergone significant changes, and global and national lawmakers have implemented new regulations specifically tailored to G-SIBs to mitigate their potential threat to financial stability. This book examines whether the G-SIB-specific regulatory frameworks are sufficiently tailored to their individualism to prevent them from exploiting overly general rules, as they did during the GFC. By analyzing the specific character and individualism of G-SIBs in relation to their history, normal functioning, and operations during the GFC, this book discusses the transformation of banking systems and the challenges and opportunities G-SIBs face, including competition from Big Tech firms, climate-related requirements, and the COVID-19 pandemic.

To address these issues, the book adopts a multidisciplinary approach that combines financial aspects of G-SIB operations with legal analysis. It describes G-SIB-oriented legal frameworks in the European Union (EU) and the United States (USA) and assesses whether G-SIB individualism is adequately reflected. The book also analyzes trends in super-SIB regulation and assesses the effectiveness of these frameworks in mitigating the risks associated with G-SIBs.

In conclusion, this book provides valuable insights into the world of G-SIBs, their legal frameworks, and the challenges and opportunities they face in the post-GFC era. It is essential for policymakers, regulators, and industry professionals to understand the unique characteristics of G-SIBs and the need for tailored regulatory frameworks to ensure their stability and resilience.

Dimension: 234 x 156 (mm)
ISBN-13: 9781032233475