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Big Banks Can Save Us All. Regulation of Global Systemically Important Banks Set to Aid Real Economy In Crisis.

The main aim of this research project is to define how to regulate global systemically important banks (G-SIBs) to maximize their ability to save the real economy in times of crisis, but at the same time without forcing them into extreme loss-bearing or making them give up on financial stability. In order to achieve this aim, the plan is to address following research questions: 1. What role did G-SIBs play during past and present economic turmoils? For this question the analysis focuses on both their negative contributions, such as inflating price bubbles, overindebtedness, or moral hazard, as well as recovery-oriented, mostly voluntary, efforts of these banks to save real economy during Great Depression, Global Financial Crisis (GFC) and Coronavirus Crisis. 2. What legal provisions concerning G-SIBs were/are binding during each of these crises and what ad hoc regulatory actions to save real economy were undertaken? How did they influence G-SIBs’ ability to aid real economy? 3. What is the optimal regulatory solution to maximally use G-SIBs and their activities as crisis mitigation tool without subjecting them to excessive state control and without giving up on the financial stability aspect?

Methodology is adjusted accordingly to each stage of the research plan. However, dogmatic legal and comparative (comparisons between US and EU, as well as between each of the crises analysed) methods should prevail, with some elements of empirical analysis of publicly available data when annual reports published by the banks will be examined.

The project shall bear following results: the long omitted ‘mitigating’ role of G-SIBs as economy saviors will be analysed and precisely defined, the innovative approach to regulations of these banks not only as preventive measures but also as recovery boosting tools will be presented, and lastly – the recommendation how to construct such rules to strike a balance between financial stability, real economy recovery and supervisory intervention will be formulated.