Farina, Tatiana Krahnen, Jan Pieter Pelizzon, Loriana Wahrenburg, Mark
Year of Publication:
SAFE White Paper 65
In this paper we argue that the own findings of the SSM THEMATIC REVIEW ON PROFITABILITY AND BUSINESS MODEL and the academic literature on bank profitability do not provide support for the business model approach of supervisory guidance. We discuss in the paper several reasons why the regulator should stay away from intervening in management practices. We conclude that by taking the role of a coach instead of a referee, the supervisor generates a hazard for financial stability.
Bank Profitability Supervisory Guidance Banking Union Financial regulation