The regulations of systematically important financial institutions in the European Union: governance of the fittest?

Significantly Important Financial Institutions (SIFIs) have long dominated the financial market without being subjected to scrutiny of regulation and supervision. The role of these institutions in the financial system is significant not only because of its complexity and its systemic impact in the economy but also because it has challenged the governance of the financial market. On the verge of the financial crisis, global financial markets have responded in different manners from state aid to state intervention or bail-out; a spur of the moment reaction to avoid major financial disruptions in the economy. Presently, the process of overhauling the regulation and supervision of SIFIs is not only a domestic issue but also a global issue. This paper examines the governance in the European Union and its Member States based on the standard set by the international standard setting bodies. Keywords: banking regulations and supervision, SIFIs, financial market regulatory institutions, European Union