Ricerc@Sapienza

After a period of long and pronounced stability, the Great Financial Crisis of 2007-2009 moved the international financial systems into a condition of severe weakness, highlighting how the profitability levels previously achieved were often built on excessive risk taking, with significant erosion of the level and quality of the capital base, insufficient liquidity buffers, weaknesses of the whole organization and governance systems. Indeed, the magnitude of that crisis resulted particularly severe, so that an unconventional effort has been deployed, at different levels, in order to address several of those concerns characterizing the international financial systems of most developed countries. Despite the efforts already exploited and the ones which are expected to be pursuit in the next future because of the enforcement of supervision framework, more recently an increasing concern emerged about the almost exclusive focus on increasing capital requirements and applying a one-size-fits-all regulatory framework, suggesting to focus on a more structured approach to supervised entities, in order to mitigate the model risk of capital adequacy framework. Through our research, we aim to contribute to the actual debate which is focused on the issues to ameliorate the banking supervision framework, especially from an European perspective, balancing two fundamental objectives. On one hand, we aim to investigate and reduce the area of underestimated risks which can undermine financial stability. On the other hand, we aim to avoid that excessive burdens hamper the capability of banks to perform its role for financing the economy, especially for countries where that task remains crucial.