8857685960

16 Vladislav Pavlat

Table 2

Advantages or disadvantages of SIFIs R/S

ADVANTAGES On the side of a government R/S institution	ADVANTAGES On the side of a SIFI
1.    A capacity to influence a proportional („optimaT) development of all branches of financial industiy of a country 2.    The prevention of disruption of financial stability	1.    The simple fact ofbeing selected as a SIFI contributes to a rise of reputation of a financial institution and contributes to the clients’ confidence. 2.    SIFfs competitive position in the industry and its econoinic power will become morę strong
DISADVANTAGES On the side of a govemment R/S institution	DISADVANTAGES On the side of a SIFI
1.    Risk of false predictions/estimates of proportionality in futurę trends 2.    Risk of limiting the econoinic power of a countiy in the intemational competition	1.    Higher costs caused by higher regulatory eąuirements 2.    Probability of less flexible behaviour (morę bureaucracy)

Source: V.P.

The advantages and disadvantages are bound to different phases of the eco-nomic cycle. They are not proportionally distributed among both parties - re-gulatory/supervisory institution and SIFIs. The latest experience showed that during the crisis, disadvantages probably - on both sides - prevail. The above considerations can be applied both to the national economy and the intemational or global economy.

Until recently, the system of national regulation and supervision of big financial companies was essentially based on company approach, i.e. on regu-lation/supervision of individual entities (a microeconomic approach). The orien-tation of intemational the intemational deregulation practically was the same: Basel I and Basel II are striking examples of this limited approach. Since the end of the 90ties, the situation was changing in favour of a new, systemie approach based on financial stability considerations: macro-economic issues were to be included into the regulation Systems. During the world financial crisis, although the govemments of the G20 countries showed a willingness to solve the most harmful effects of the crisis, practical anti-cyclical policy measures were in the hands of individual countries govemments.

The need for a new intemational regulatory architecture was manifested - inter alia - in creating new national and intemational regulatory institutions. The intemational strive for financial stability was manifested by setting up the Financial Stability Board and by continuous preparative works for a tran-