Abstract

Banking regulation plays an important role in the process of ensuring financial stability, the national economy, equitable distribution of wealth and the most efficient use of financial resources. As a key regulatory tool, Banking Regulation monitors and monitors financial transactions to improve their profitability and efficiency. The author points out that the main areas of banking regulation and supervision are to control the processes of formation, operation and liquidation of commercial banks. The article focuses on the fact that the 2008 financial crisis has become a motivating driver for reforms in the banking system of Europe and America. The main purpose of the article is to assess the impact of changes in the European Banking System, in particular in the context of the study of the features of the Financial Markets Directive, on the functioning of the global economy. This paper provides a critical review of the literature from the point of view of analyzing the specificity of MiFID II in the context of its impact on the economic aspects of the country’s development. The implementation of the Directive requires significant financial investment, but these costs will pay off given the fact that MiFID II is well-designed and aimed at providing more secure protection and greater customer base stability. However, the author points out the underdevelopment and inconsistency of the regulatory framework, which is of greater concern than the cost of implementing MiFID II. Thus, the idea of the likelihood of financial and economic problems in the process of influence of banking regulation on the development of the global economy is substantiated. Notwithstanding these shortcomings, the regulatory framework for the formulation and implementation of the Directive is a significant contribution to the regulation of the financial sector. The results of the study represent scientific and practical value for academics, politicians, banking financial management of economic entities, stakeholders to better prepare and evaluate future changes as a result of reforming banking regulation.

Keywords: Directives, Economic growth, Financial crisis, MiFID, Regulation.

JEL Classification: E58, G21, P33.

Cite as: Islam, S.T., Khan, M.Y.H. (2019). Evaluating the changes in the European Banking Regulation – MiFID and its possible effects on the Global Economy: A Theoretical Study. Financial Markets, Institutions and Risks, 3(4), 24-31. http://doi.org/10.21272/fmir.3(4).24-31.2019.

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