The European Union, the Euro area and the European countries have started to reform the financial sector in multiple and radical ways. The reforms respond to the increased awareness of the systemic significance of large banks for the financial sector and the close and potentially perilous relationship between sovereigns and their SIFIs.

Of particular significance to this study were :
(i) the new centralized banking supervisory regime for SIFIs (the “Single Supervisory Mechanism“);
(ii) the restructuring and resolution regime for banks (the new “insolvency law“ for banks) and
(iii) a significantly stronger focus on macroprudential regulation.

The project examined the importance of these reforms and analyze their consequences for European banks and their creditors. It attempted to raise and answer the questions as to whether these reforms promise to create more stability in Europe and if any weaknesses remain. It included the perspective of European central banks (ECB and national central banks) that are given increasingly important roles in establishing and maintaining financial stability in Europe.