Julien Noizet on banking regulation and ‘the importance of intragroup funding’

Julien Noizet’s blog ‘Spontaneous Finance’ in my view is the best blog out there on banking issues. Julien’s blog often deals with the economic and financial impact of financial regulation. Noizet used to be a banking analyst for Fitch Rating so he surely should understands about credit risk and banking. I highly recommend to everybody interested in financial and banking regulation to follow Julien’s excellent blog.

Recently Julien has written about how financial regulation is increasing suffocating the financial sector – particularly in Europe. Julien focuses on regulatory failure and particularly new regulatory limits on ‘intragroup funding’ in international banking groups.

What makes Julien’s discussion interesting is not only that he uncovers the impact of present regulatory failure, but he also has an excellent discussion workings of different historical banking systems – Julien looks at the US, Canada and Germany and looks at what how present regulatory changes in Europe actually risk making the banking system more fragile.

Read Julien’s posts here:

Is regulation killing banking… for nothing? The importance of intragroup funding

The importance of intragroup funding – The 19th century US experience

The importance of intragroup funding – 19th century US vs. modern Germany

The importance of intragroup funding – 19th century Canada

We are presently going through a period of regulatory overkill in the European banking sector and while regulators believe that they are reducing banking risks they are likely doing the opposite. As Charlie Calomiris would say – the European banking is becoming Fragile by Design. Julien’s blog posts describes these risks very well.

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