The Disintermediation of Banks: Regulatory Paths and Evolution (Euro-Balkan Law and Economics Review)

Summary

• Investment firms with total consolidated assets of €30 billion or more are categorized as credit institutions under Article 4 of Regulation (EU) No 575/2013.p.7
• Net managed assets in European Long-Term Investment Funds (ELTIFs) stood at €2.4 billion across the EU in October 2021.p.17
• EU Regulation 2020/1503 caps crowdfunding project thresholds at €5 million calculated over a 12-month period per project owner.p.26
• Crowdfunding service providers are subject to prudential requirements of at least €25,000 or one-quarter of their previous year's fixed overheads.p.28
• Lending-based real estate crowdfunding in Italy generated €83.15 million in 2022 before expanding to €115.79 million in 2023.p.30
• Buy Now, Pay Later transactions in Italy expanded rapidly, recording an annual growth rate of 134% in 2021.p.31
• Poste Italiane disintermediates traditional bank savings collection through a physical network of 12,755 post offices as of 2023.p.39

Key insights

1. The 30th anniversary of Italy's Banking Consolidation Act highlights regulatory paths that allow non-bank operators to compete directly with traditional credit institutions.p.4
2. Issuing a digital euro as a direct liability of the European Central Bank introduces systemic disintermediation by shifting liquidity management away from commercial banks.p.10
3. Italian law created initial credit disintermediation by permitting financial intermediaries under Article 106 of the TUB to grant loans without offering bank deposits.p.12
4. EU Regulation 2020/1503 provides a unified cross-border framework for lending and equity crowdfunding without requiring platform operators to take credit risk onto their own balance sheets.p.21
5. The regulatory framework for individual credit portfolio management on crowdfunding platforms leaves unresolved liability issues regarding risk coverage funds.p.27
6. The ECB's PISA framework broadens payment oversight by replacing traditional funds transfer concepts with a wider value transfer scope encompassing stablecoins and digital tokens.p.36
7. Shadow banking entities unbundle traditional banking functions such as maturity transformation, liquidity transformation, and credit risk transfer across non-bank financial intermediaries.p.41
8. European financial regulations target shadow banking vulnerabilities through leverage restrictions on securitizations, money market funds, and securities financing transactions.p.42
9. Global platform operators like Alipay and Tencent demonstrate how payment services serve as the foundation for building broad financial ecosystems that bypass traditional banks.p.46
10. Ambiguities surrounding the scope of ancillary and instrumental activities under Article 10 of the TUB create legal uncertainty for banks transitioning to platform business models.p.50