The Regulation Framework for the Banking Sector: The EMU, European Banks and Rating Agencies before and during the Recent Financial and Debt Crisis

A regulation framework for the banking sector should be characterised by transparency,responsibility and performance in several important areas. These areas are the global and Europeanframework for corporate financial reporting (CFR), risk management (RM), stockholder value creation(SVC), corporate governance (CG), corporate social responsibility (CSR) and sustainable development (SD).The regulation framework for the banking sector must also consider the fiscal and monetary environment inwhich a banking institution operates. The global rating system and the rating agencies will also have animportant impact on any regulation framework for the banking sector. These two factors play a key role whena financial, credit or debt crisis occurs. In this article, a holistic regulation framework for the banking sector ispresented. The article is based on European banks that are part of the European Monetary Union (EMU).Initially, it focuses on the timelines and review the integration of the European Monetary Union, relevantlegislation and information on member countries’ banking sectors. This information creates the frameworkfor the proposed model. The article considers all of the above factors in creating a holistic regulationframework for the banking sector to present in the context of the recent financial, credit and debt crises thathave taken place in the EMU