Few systemically important financial institutions (SIFIs) that enjoy a strong market position on the domestic market or internationally in accordance with the too big to fail principle and in this case called G-Sifi. This is because the rating agencies grant them higher grades because of the government assistance they are likely to receive in an emergency; this is referred to as supported ratings. This gives these banks a financing advantage. – In addition, many investors will prefer a Sifi because their deposits appear safer there than with competitors without a possible government protection shield. – There are now many ideas about ways to reduce the Sifi oligopoly – such as stricter microprudential supervision; the right of the state to break up and split up holdings in the financial market. But there is still a difficulty in precisely delineating sifis (based on criteria such as size, interconnectedness, substitutability and complexity) – See bad bank model, German, bank, systemic, bank bail-in, bank size, optimal, bank bail-in, reverse, bank bail-in law, bazooka, exit strategy, financial market stabilization agency, financial market interdependence, financial stability, size confidence, margin pressure, money-matters theorem, moral hazard, contingency fund for crisis banks, restructuring management, repercussions, systemic, stability fund, European, systemic relevance, too big to save principle, forced convertible bond. – Cf. BaFin’s 2011 Annual Report, pp. 50 ff. (detailed report on international efforts to identify and regulate sifis), Financial Stability Report 2012, p. 98 (continuing dangers from the collapse of globally interconnected institutions), Financial Stability Report 2013, 104 f. (capital surcharges for sifis, so-called sifi buffers).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/