This document summarizes Dr. Elena Stavrova's presentation on financial security nets as factors of banking system stability. The main goals of safety nets are to protect investor rights during banking turmoil and encourage stable deposits. Key objectives are establishing single supervisory mechanisms, synchronized deposit guarantee systems, and uniform bank liquidation processes. Issues addressed include "too big to fail" banks, universal banking risks, regulating non-banks, improving transparency, determining sufficient capital, rethinking supervision models, and achieving international cooperation to prevent risks from spreading across countries.

1. FINANCIAL SECURITY NET AS A
FACTOR BANKING SYSTEM
STABILITY
Dr Elena Stavrova
ECCE Conference, Tallinn,
16-18.06.2013

2. Global trends:
• Main components of the macroeconomic
environment have increased;
• Financial industry occupies an advantageous
position ;
• Adopt and adapt to technological advances ;
• The need for integration of financial systems ;
• To do of regulatory pressure monitoring

3. Main goals of safety net:
• First - protecting the rights of investors in
the banks and the public by the turmoil in
the banking system.
• Second - is to encourage investors to hold
stable government

4. Key objectives
• First - they offer the construction of a single
supervisory mechanism on the stability of the
banking systems of the Member States;
• Second, synchronized systems of bank deposits
guarantee;
• Third, development of uniform mechanisms for
liquidation of failed banks.

5. Dealing with the "too big to fail"
• Too big to fail, to big to be monitored , to
big to be controlled;
• Purposes- to prevent bank depositors and
it's creditors

6. Mitigation of universal banking risks
• Bank panic
• Universal and investment bank
differences

7. Regulation of non-banks
•
•
•
•
•
Shadow banking system –
as an easy credit companies ,
hedge funds,
private equity funds,
insurance companies,

8. Improve transparency
• efficient supervision
• ‘The corporate governance framework
should ensure that timely and accurate
disclosure is made on all material matters
regarding the corporation, including the
financial situation, performance,
ownership, and governance of the
company.

9. Determining "sufficient capital"
• higher levels a larger buffer to meet the
turmoil in a recession

10. Rethinking supervision model
• European banking union :• To break the link
between the Member States governments and
their banks and their involvement in uncontrolled
use of banks to finance budget deficits; to
restore lost trust in the financial sector;
Establishment of a system for ensuring
investments and savings to customers of
banking institutions; to ensure that banks do
serve the community and the real economy.

11. Achieving international cooperation
• International claims of banks increased ;
• well-realized international bond market;
• a high risk of spreading from one country
to another country

13. Thank you!!
stavrova@swu.bg