Turn on more accessible mode. Turn off more accessible mode. Skip Ribbon Commands. Skip to main content. Turn off Animations. Turn on Animations. You can copy-paste data from selected file to local excel file. Regulations In light of the Egyptian banking sector reform program and as part of the recommendations of the Euro system technical assistance program, the regulations department was established in mid of as an independent department under the banking supervision sector.
International best practices and regulations issued taking into consideration the nature of the Egyptian banking sector. Responding promptly to developments in the banking sector. The Egyptian legal and accounting framework iv.
The policy can be more effective if commercial banks pass the increased costs on their retail bank deposits held by the general public to maintain interest margins and profits. This happens when the general public no longer utilises cash. Bank accounts can also be used to pay credit card companies by allowing them to debit payments for bills from accounts. Developments in digital wallets and cashless devices that facilitate payments through apps on smartphones by adding debit cards and credit cards have enabled faster and more efficient retail payments.
While bank deposits are not legal tender, their values are denominated in legal tender and can be exchanged at a one-to-one value. Nonetheless, they are riskier than cash because the issuers could go bankrupt — although a deposit insurance system guarantees deposits of a failing bank up to a certain amount. Similar to reserve deposits, bank deposits are non-anonymous and transactions are traceable Table 1. Bank deposits are a digital currency, so a positive or negative interest rate can be applied. Commercial banks generally refrain from charging a negative rate for fear of losing clients, and instead may quietly increase charges on their services such as ATM usage fees.
Real-time fast settlement systems are increasingly available 24 hours a day, days a year for retail bank depositors in many countries.
Central bank digital currency: Concepts and trends | VOX, CEPR Policy Portal
The size of bank deposits is much larger than the size of central bank money due to the large number of financial institutions and money creation activities, which generate deposits and loans. In addition, new types of private sector money based on distributed ledger technology — often called digital tokens or crypto assets — have emerged over the past decade. The innovative nature of this technology lies in the mechanisms through which the process to verify transactions is conducted by unknown, independent third parties without relying on a central manager.
Blockchain is a type of distributed ledger where each transaction is verified using encryption keys and digital wallets; the numbers of the transactions are recorded on a new electronic distributed ledger, which is then connected through a chain using hash functions to previous, proven distributed ledgers using the proof-of- -work process. There are currently over 2, digital coins with features that vary substantially. Those tokens can be exchanged for some goods and services in many countries. Digital tokens are similar to cash since peer-to-peer transactions can be made instantaneously, 24 hours a day and days a year Table 1.
All the transactions are anonymous but are technically traceable. A positive or negative interest rate can also be applied. Consumers and investors are not well-protected since a regulatory framework is almost non-existent. Some central banks have experimented with the application of digital tokens in their existing businesses by issuing their own digital tokens. All of these CBDCs are digital currencies. Source : Prepared by the author.
All the transactions of both proposals are traceable since an underlying register enables the recording of all transactions and identification of the rightful owner of the digital e-krona Table 2. Thus, transactions under the two proposals are non-anonymous because all transactions are identified.
One exception of non-anonymity is the case of a prepaid e-krona card, on which e-krona are already stored and which can be used as cash and handed from one user to another. The Riksbank plans to experiment whether these proposals are, practically, implementable. So far, most other central banks have not expressed an interest in these proposals.
This is mainly because of concerns that commercial banks might suffer a loss in retail deposits from their accounts to those of a central bank, and would thus lose the sources of loan financing needed to extend credit to firms and individuals. This concern could be mitigated, however, if the central bank were to pay a lower interest rate to the general public than commercial banks do to their retail customers.
Another concern is that bank runs may be exacerbated in the event of a banking crisis via a shift in deposits from commercial banks to the central bank, thereby deepening the crises. In addition, the amount of central bank notes in circulation has continued to rise in most countries, so there is no urgent reason for other central banks to examine these proposals at this stage. As for monetary policy, it is technically possible for the Riksbank to impose a positive or negative interest rate under these proposals.
Under the third proposal, CBDC has the features of anonymity, traceability, 24 hours a day and days a year availability, and feasibility of an interest rate application Table 2.
Banking regulation in France: overview
The proposal is relatively popular among emerging economies, mainly because of a desire to take the lead in the rapidly emerging fintech industry, to promote financial inclusion by accelerating the shift to a cashless society, and to reduce cash printing and handling costs. This reflects the fact that existing retail payments and settlements systems have become more efficient and faster and are available 24 hours a day and days a year in some economies, so there is no strong case for promoting the proposal. Moreover, Article 24 of the SSM Regulation establishes an incompatibility regime for the ABoR members and provides that they cannot be concurrently staff of the ECB, as well as current staff of competent authorities or other national or Union institutions, bodies, offices or agencies that are involved in tasks related to the ECB within the SSM.
In order to further strengthen the independence of judgement of the body, the SSM Regulation requires the members to be of high repute and to have relevant knowledge and professional experience, including supervisory experience, in the fields of banking or other financial services. This provision mirrors the locus standi conditions set out in Article 4 TFEU for the action for annulment before the Court of Justice. Despite the structural differences between the two procedures, it is submitted that the ABoR should interpret and apply the admissibility requirements in light of the relevant case law of the ECJ.
Therefore, in principle, internal documents and acts of a preparatory nature, like for instance intermediate acts in a multi-step procedure, are not directly challengeable before the ABoR. One may argue that the scope of the review is not limited to the conformity of the contested act with the SSM Regulation stricto sensu , but instead has to be understood as a broader reference to all the applicable substantial and procedural law, as referred thereto.
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As the next section clearly demonstrates, this is a novel situation and represents one of the biggest challenges for the ECB within the new integrated system of banking supervision. Moreover, the board verifies whether the relevant procedural rules were fully respected. It can be also argued that in the assessment of the procedural legality of the decision, the ABoR also checks the compliance with the general principles of EU law, as enshrined in the case law of the ECJ and recalled by the SSM Regulation.
The review procedure can be divided in three phases 50 : a the preparatory phase, which includes the assessment of the admissibility of the request, b the examination phase, which may also entail an oral hearing and the collection of the relevant evidence, and c the deliberative phase, ending with the adoption of the opinion and its submission to the Supervisory Board. Despite a certain margin of flexibility, the ABoR assesses the admissibility of the application before examining whether the request is legally founded.
If the request is held inadmissible wholly or in part, the assessment is recorded in the opinion and submitted to the Supervisory Board. If the request is admissible, the ABoR may propose to the Governing Council to suspend the effects of the contested decision, subject to the conditions mentioned above.
It is worth noting that the power to suspend the decision is granted to the same body that shortly before adopted the contested decision, not exercising its power to object in accordance with Article 26 8 of the SSM Regulation. In the second phase, the ABoR examines whether the substantial and procedural grounds raised by the applicant are well-founded. Pursuant to Article 10 of the ABoR Decision, 52 establishing the Rules of procedures of the board, the internal review is limited to the examination of the grounds set forth in the notice of review and the ABoR cannot raise ex officio new grounds for review or complement the submissions filed by the applicant.
In this respect, the ABoR acts similarly to a Court within the review of legality. Quite interestingly, however, the Supervisory Board, after the review of the ABoR, may also take other elements into account when preparing its proposal for a new draft decision, thus acting in the pursuit of the general objectives entrusted to it by the SSM Regulation. This provision shows quite clearly the different nature and function of the two bodies within the decision-making process designed by the SSM Regulation.
In this phase, the ABoR collects and analyses all the relevant information for its final deliberation. In particular, in order to carry out an efficient conduct of the review, the Chair may give directions to the parties, including directions to produce documents or provide information. It is important to highlight that the oral hearing is normally scheduled by the board as it represents a fundamental step in the review process. Indeed, the hearing is an important source of information for the board itself; it provides the applicant with the opportunity to present its view and to make oral representations before an independent panel, to hear the reasons of the ECB and to have a direct confrontation with it.
The hearing is also essential for the ECB which has the possibility to provide a more extensive reasoning of the contested decision, to achieve a different evaluation of its conduct or even to reconsider its discretionary choices. Another tool ensuring the right of defence of the parties is the possibility to request to the ABoR the permission to adduce witness or expert evidence in the form of a written statement or to call a witness or expert who has given a written statement to give oral evidence at the hearing.
However, the ABoR Decision makes it clear that such permission can only be given if the panel considers it necessary for the just determination of the review. Accordingly, it is argued that the ABoR can request the ECB to provide its legal opinion, whenever the board might consider it beneficial for the accurate evaluation of the case at hand, without prejudice to the final autonomous assessment of the ABoR.
The last step of the procedure is the deliberation phase. The opinion is adopted by a majority of at least three members; the alternates do not take part in the deliberation. As anticipated above, the opinion is not binding on the Supervisory Board and can only propose to either abrogate the contested decision, to replace it with a new decision of identical content, or to replace it with an amended one.
In the latter case, the Supervisory Board is subject to an enhanced motivation obligation. Lastly, the ABoR opinion is notified to the applicant only together with the new draft decision prepared by the Supervisory Board and adopted by the Governing Council.
It is not possible to file a request for review against the new decision. It is important to highlight that in such cases the initial ECB decision cannot be challenged before the Court since, following the ABoR opinion, it has been either repealed or replaced by a new ECB decision. Also, the ABoR opinion as such cannot be challenged before the Court; however, the arguments put forward by the ABoR will be disclosed in Court and the ECJ may take them into account within the judicial review process.
This means that, in principle, it is always possible to choose between the administrative way and the judicial one when opposing an ECB decision. However, after the ABoR has delivered its opinion and the Governing Council has adopted a new decision, the affected party can only pursue the judicial remedy. This way is not barred by time-limit requirements as the new period starts running after the new ECB decision replacing the first one is notified to the applicant. It is a remedy, in addition to the judicial one, that the legal system grants to persons affected by an ECB decision in the area of prudential supervision.
Compared to the judicial route, proceedings before the ABoR present some important advantages. First, the ABoR offers a qualified assessment of the case, as the review is carried out by persons with a particular knowledge and experience in the field of banking supervision.
Moreover, proceedings before the administrative board are concluded in a short time, i.