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European Financial Services Round Table

Publications & Research - Stability & Growth


Promoting financial stability
The private sector has undertaken several initiatives to strengthen financial institutions and to improve services. However, private sector initiatives alone are not sufficient to reinstall a well-functioning financial system.

Therefore, the EFR strongly supports the policy goals of increasing financial stability and restoring confidence in the financial sector. Key elements include appropriately risk-based and calibrated capital and liquidity requirements, crisis management regimes, risk management and enhanced supervision as well as sound corporate governance.

Key to financial stability is, in particular, an effective interface between macro and micro prudential oversight. The EFR supports the new European supervisory system however improvements to the current setup and practices, particularly at the international level, have to be made over time to improve efficiency.

An effective European crisis management framework is needed in case measures taken to prevent a crisis fail and no private sector solution is possible. This would need to stimulate recovery or allow the orderly resolution of banks, with the aim of preventing spill-overs to other institutions, ensuring financial stability, and the avoidance of moral hazard and the use of tax payer funds.

Promoting economic growth
Financial institutions, and the financial sector as a whole, should ensure to offer solutions promoting economic growth in Europe. EFR Members are committed to help policy makers to return to the path of economic growth and to support the euro as a sound and stable currency.