EU Financial Research Articles

Implications of EU Economic and Financial Sanctions against Russian Federation

In view of the annexation of Crimea by the Russian Federation and the provocation of the conflict in Donbas in 2014, the EU adopted and implemented Council Regulation (EU) No 833/2014 of 31 July 2014 in reaction to Russia’s measures undermining Ukraine’s territorial integrity as well as the sovereignty and independence of the country. This period is characterized by erosion of bilateral trade and economic relations between the EU and Russia. After the beginning of Russia’s war against Ukraine in February 2022, the European Union adopted a new series of economic and financial sanctions towards Russia: restrictions on trade; a SWIFT ban for certain Russian banks; restrictions on Russia’s access to the EU’s capital and financial markets and services; a ban on transactions with the Russian Central Bank and others. In the autumn of 2022 the conflict further escalated with the so-called “partial mobilization” in Russia and the further unlawful referenda for annexation of Ukrainian territories. Two years later (February 2024), the war is still raging and the European Union continues its policy of adopting new packages of sanctions against Russia.

Protecting EU Financial Interests in the Collection of Tax-Based Own Resources

Protecting EU Financial Interests in the Collection of Tax-Based Own Resources

Challenges Posed to the EU Financial Market by the Implementation of the Concept of Sustainable Financing

Abstract The subject of this study is, firstly, the identification of new obligations for financial institutions and supervisors resulting from the normative inclusion of ESG (environmental, social and governance) policy in financial market regulation. Secondly, we will answer the question of whether and to what extent the current regulatory pattern is changing in connection with ESG policy and, for this purpose, conduct an examination in the light of the provisions of the sustainable finance risk law from the perspective of a financial institution operating on the financial market, taking into account supervisory regulations in this area. The study also aims to consider various possible solutions for the optimal implementation of the policy of counteracting sustainable development risks in financial market law.

The Future of Equivalence in the EU Financial Sector

AbstractThe future of equivalence in the EU financial sector does not look all that bright. Granting third-country entities access to the EU financial markets is increasingly less about reliance on equivalent third-country rules and equivalent third-country supervision. Considerations other than equivalence are increasingly given more relative weight, either explicitly or implicitly, in particular (i) EU financial stability risks, (ii) EU market integrity, (iii) EU retail investor protection, (iv) preserving or regaining EU autonomy in an increasingly complex world (e.g., Brexit and the economic rise of China), (v) protecting EU entities against competitors from third countries, (vi) trying to conquer market share in a lucrative business (e.g., derivatives clearing), and (vii) other EU policy considerations. These considerations are gaining ground not merely in relation to the question of whether an equivalence framework should even be in place, and if so, whether equivalence decisions should indeed be taken, but also with regard to the regulatory and supervisory framework that the EU applies to (1) entities established in third countries for which the Commission has adopted equivalence decisions, and (2) third-country branches established in the EU. In view of this, the Territorial Approach and the Extra-Territorial Approach are clearly on the rise, in each case to the detriment of the Equivalence Approach. At the same time, loopholes in the execution of the Territorial Approach continue to exist at the national level, at least for the time being.

Collective Policy Learning in EU Financial Assistance: Insights from the Euro Crisis and Covid‐19

This article examines policy change in the EU’s financial assistance regime through a collective learning perspective. By defining a financial assistance regime as the set of rules governing the disbursement and withdrawal of funding to the member states in the context of crisis management, the article seeks to address the following research question: How can we explain the exact form of change in the EU’s financial assistance regime between the euro crisis and the Covid-19 pandemic? The article finds that financial assistance in the EU moved from “intergovernmental coordination” with the European Stability Mechanism to a form of “limited supranational delegation” with the Recovery and Resilience Facility and argues that such a change is due to a collective policy-learning process. This finding suggests that the EU tends to learn from past crisis experiences, freeing itself from established institutional constraints, only when the next crisis becomes a concrete cause for concern. However, when the next crisis strikes, the EU is indeed able to radically alter its practices based on previous policy failures.

Application of EU Programs and Financial Instruments for Ukraine

Application of EU Programs and Financial Instruments for Ukraine

Third Countries and EU Financial Market Access: Technocracy, Politics, and the End of Deference?

Third Countries and EU Financial Market Access: Technocracy, Politics, and the End of Deference?

Cases and Materials on EU Financial Law

Cases and Materials on EU Financial Law

The Protection of the EU's Financial Interests and Pandemic Emergency Tools: an Analysis of the Control Mechanism between the EU and the Member States

The paper examines three case studies: RescEU, SURE, and EU support for SMEs. These case studies represent three relevant EU actions that responded to the first phase of the Covid-19 emergency in the sectors of health, work, and economic support for businesses. The main research questions are: What kind of actions have been financed in these sectors with EU funds? What kind of administrative checks were carried out for these EU emergency funds? The paper looks at these issues from a multilevel perspective: starting from the EU framework it reaches national levels, especially Italy, Poland, Belgium, and Germany. In the conclusions, the paper seeks to understand how promptly the EU emergency actions were taken and whether the planned controls prevented fraud.

The Determinants of the Environmental Performance of EU Financial Institutions: An Empirical Study with a GLM Model

Within the last few decades, the issue of the environmental performance of European financial institutions has become a significant feature of their strategic plans. Financial institutions can contribute through their own activities and investments, and also through their relationship with economic sectors and consumers, in decreasing environmental footprint. The purpose of this research is to investigate the determinants that affect the environmental performance of European financial institutions. Financial markets have been selected as the main research field for this study, as it presents an opportunity for environmental policy and is useful in view of the need for a wider range of policy instruments. Moreover, on a more practical level, financial institutions can interact with the environment in several ways, such as investors, innovators, valuers, powerful stakeholders, and polluters. The study is based on a mixed methodology approach, which integrates: (i) bibliometric analysis based on R package and (ii) panel data analysis with the assistance of a generalized linear model (GLM). Findings show that socioeconomic, governance, and technology factors positively affect the environmental performance of European financial institutions. Moreover, the incorporation of alternative energy sources, such as renewable energy in the corporate function, is a requirement for greening the financial institutions. The above can guide financial institutions to develop the appropriate strategies for decreasing their environmental footprint, improving their operational efficiency, and becoming more attractive and competitive in the market.

EU Financial Instruments in Practice: SMEs’ investments in energy efficiency and renewable energy in Croatia

In the context of the EU development strategy based on a climate neutral economy by 2050, an important dilemma for policy makers is how to provide an incentive for companies, especially small and medium-sized enterprises (SMEs), to make energy efficiency and renewable energy projects their high priority. The aim of this paper is to provide an independent empirical assessment of EU financial instruments and its barriers, used by SMEs targeting energy efficiency and renewable energy. Ex-Ante evaluation was carried out on a sample of 320 SMEs in Istria County, Croatia. The results of the empirical research suggest that despite of a low interest of investors in green projects, the use of the innovative financial instrument would significantly contribute to an increase in the number and value of investments in energy efficiency and renewables. Similar to most of other studies, our results also confirmed that administrative and bureaucratic barriers are perceived as the biggest obstacle for SMEs. It is therefore necessary to reduce the number of bodies involved, improve the quality of information dissemination and simplify procedures.

The Impact of Brexit on EU Financial Sector Governance

The Impact of Brexit on EU Financial Sector Governance

Shadow Rulemaking: Governing Regulatory Innovation in the EU Financial Markets – ERRATUM

Shadow Rulemaking: Governing Regulatory Innovation in the EU Financial Markets – ERRATUM

Equivalence Decisions in the EU and UK Financial Services Sectors Post-Brexit

Financial services are largely left out of the EU-UK Trade and Cooperation Agreement that was reached at the end of December 2020. The issue of cross-border market access for financial services firms based in the EU and in the UK could be resolved by the adoption of mutual equivalence decisions. The UK made a number of equivalence decisions pre-Brexit to allow EU-based financial services firms access to the UK market. The EU has not reciprocated. Consequently, UK-based financial services firms have moved business into the EU to maintain client access. The article discusses advantages and disadvantages of the EU and the UK’s different strategies as regards market access and whether equivalence decisions in the area of financial services can be used to build up a trustful relationship between the EU and the UK post-Brexit. Equivalence decisions, Brexit, pre-Brexit regulation, post-Brexit regulation, financial services regulation, Joint UK-EU Financial Regulatory Forum, market efficiency, market relocation, Singapore-on-Thames, systemic risks

Interaction of EU Financial Interest and Legal Principles in EU Criminal Law

This article examines the intersection differing the supremacy of law, the effectiveness of the protection of the financial interests of the European Union, and the principles of legality the same as predictability of the law in EU criminal law. The authors analyze the jurisprudence of the Court of Justice, assessing cases where the principle of the supremacy of EU law is applied to ensure the effective protection of the Union’s financial interests and where the ECJ imposes mandatory exceptions to this principle for national courts. In order to strike a balance between the principles of effectiveness and legal predictability, different liability conditions are assessed for a natural person and a Member State that fails to fulfill its obligation to protect the EU’s financial interests.

Shadow Rulemaking: Governing Regulatory Innovation in the EU Financial Markets

AbstractThe number and diversity of the European Supervisory Authorities’ (ESAs) soft law acts continue to grow. The recent reform of the ESAs’ founding regulations added two new instruments to their toolbox, “questions & answers” (Q&A) and “no action letters,” both invented and already used by the ESAs in their supervisory practices. The reformed regulations continue to encourage the ESAs to pursue their tasks by developing new instruments and convergence tools. The article assesses the ESAs’ rulemaking and regulatory innovation from a broad governance perspective, asking what type of procedural controls and review mechanisms would best facilitate beneficial forms of regulatory innovation while also controlling its excesses. It is argued that the main shortcoming of the present regime is not the lack of adequate procedural controls so much as the incomplete system of legal remedies. Flexibility should be preserved, but more credible judicial controls are needed to check the ability of soft law to bypass legislative processes.

Balancing Confidentiality and Transparency: The ECSPR Professional Secrecy Standard in Light of Cross-Sectoral EU Financial Regulation and ECJ Case Law

Balancing Confidentiality and Transparency: The ECSPR Professional Secrecy Standard in Light of Cross-Sectoral EU Financial Regulation and ECJ Case Law

Financial Literacy on EU Financial Infrastructure and Institutions: Points of view from students of an EU candidate country

Financial Literacy on EU Financial Infrastructure and Institutions: Points of view from students of an EU candidate country

Niamh Moloney, The Age of ESMA – Governing EU Financial Markets, Oxford: Hart Publishing, 2018, 392 pp, hb £81.00

Niamh Moloney, The Age of ESMA – Governing EU Financial Markets, Oxford: Hart Publishing, 2018, 392 pp, hb £81.00

The Future of EU Financial Law

The imprint of the major themes of our time is as apparent in the field of financial law as in any other. Obvious examples are the coronavirus crisis, sustainability, the onward march of technology, the unceasing struggle between integration and federalism on the one hand and protectionism and nationalism on the other and, last but not least, the pressure brought to bear by leading geopolitical powers such as China, the United States and Russia. These forces have largely shaped financial law in Europe, especially in the recent past, and will continue to do so in the future.Where these forces are actually leading us, however, is less easy to predict. It remains to be seen whether all the new European rules and legislative proposals will produce a fully integrated, sustainable and digital European Capital Markets Union and a complete and smoothly functioning European Banking Union. And it is still much too early to gauge whether Brexit will work out well for the EU27.But one thing is certain: Europe’s tentacles reach deep into financial law. No matter what finance-related topic one studies, whether it be combating money laundering and terrorist financing or issues such as deposit insurance schemes, non-performing loans, the coronavirus crisis or local products such as investment-linked policies and share leasing, one is bound sooner or later to have to deal with EU law. In other words, for practitioners of financial law, the need to deal with EU law is simply a fact of life. As long as the European Union continues to exist, of course.