Building Resilience and Managing Financial Crises

This session looks at current risks to financial stability in Europe, also from a global perspective. After ten years of a new micro- and macroprudential supervisory landscape in Europe, it critically reviews whether risks are adequately captured by regulatory and supervisory measures and whether employed instruments are commensurate.

This session discusses the implications of flighty bank deposits in the digital age for containing confidence shocks and bank runs. Which lessons can be drawn from experiences in recent financial stress episodes? Is there a case for tightening bank liquidity regulation or collateral requirements? What are the trade-offs involved in policy measures that are aimed at reducing deposit flight risk, such as extending deposit guarantee coverage?

This session will focus on the balance sheet approach to crisis intervention. What effect do various crisis management tools have on a bank’s balance sheet? More specifically, the session will critically assess the use of capital injections and guarantees during financial crisis episodes.

This session draws key lessons from past crisis-related non-performing loan (NPL) reductions which policymakers should be aware of to swiftly and effectively address a rise in under- and non-performing loans in future crisis episodes. The panel will, among others, critically assess the use of deferral strategies, public guarantee schemes and centralized solutions in resolving a crisis-related surge in distressed assets.