The Case for Banking Regulation

Christos V. Gortsos ()
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Christos V. Gortsos: National and Kapodistrian University of Athens

Chapter Chapter 1 in The European Banking Regulation Handbook, Volume I, 2023, pp 3-83 from Springer

Abstract: Abstract This chapter offers an introduction to the theory of banking regulation. It first briefly develops on the functions of the financial system, banking intermediation, and the policy objectives and instruments of financial regulation in general and of banking regulation in particular. After establishing that the key policy objective in banking regulation is preservation of financial stability, the chapter focuses, in more detail, on the instruments which constitute the “bank safety net”. The financial and other (including environmental) risks to which banks can be exposed are then discussed as the basis for prudential measures in banking (authorisation requirements, microprudential banking regulation and supervision, macroprudential policies). The following sections discuss the crisis prevention measures in banking, the crisis management measures (lending of last resort by central banks, banking resolution and deposit guarantee), as well as the institutional relationship among the bank safety net components and the relation with macroeconomic policies.

Keywords: Financial system; Banking intermediation; Financial risks; Bank safety net; Prudential measures; Crisis prevention measures; Crisis management measures (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-32859-6_1

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DOI: 10.1007/978-3-031-32859-6_1

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