Banks’ Trust in the EU Macroprudential Regulation
Banks’ Trust in the EU Macroprudential Regulation

Summary/Abstract: Prior studies suggest that regulatory uncertainty is potentially detrimental to the wider economic performance, to the effectiveness of regulatory measures and to the objective of harmonized rules and a level playing field across jurisdictions. This paper discusses on the applicability ofbanks’ perceived trust as a method to evaluate the quality of the EU macroprudential regulation.Accordingly, the regulatory credibility, as opposed to regulatory uncertainty, is assumed toindicate consistent, predictable and solid regulatory and institutional environment. This paperargues that the perception of trust and the regulatory credibility are interrelated so that one cannotexist without the other. For the purpose of this study, a representative survey was conductedwith Finnish banks and conglomerates. Although the respondents expressed, overall, slight trustin the ability of the renewed EU macroprudential regime to accomplish its intended objectives,definitive and direct conclusions are avoided. This is due to the several limitations of the surveyand as such, the results are merely to provide context for the paper.

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