Towards Deeper Financial Integration in Europe: What the Banking Union Can Contribute

Artikel

The European Banking Union is a major step forward in fixing major deficiencies in the institutional framework of the Euro area. The absence of effective banking supervision and resolution powers at the European level promoted excessive private risk-taking in the up-run to the Euro crisis. Effective private risk sharing once risks materialized has been hampered. A properly designed Banking Union facilitates and improves private risk sharing, and it is thus a necessary institutional complement to a monetary union. Yet, the institutional framework of the Banking Union needs further strengthening in three regards. First, the supervisory framework needs to ensure uniform supervisory standards for all banks, including those located in non-Euro area countries. Also, conflicts of interest between monetary policy and banking supervision need to be mitigated. Second, bank resolution suffers from a highly complex governance structure. Restructuring and bail-in rules allow for a high degree of discretion at the level of the resolution authority. We propose to introduce a statutory systemic risk exception, by which the exercise of discretion would be reduced, thereby strengthening the credibility of the bail-in. Third, in order to enhance the credibility of creditor involvement, fiscal backstops and ex-ante specified cross-border burden-sharing agreements are needed.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Credit and Capital Markets – Kredit und Kapital ; ISSN: 2199-1235 ; Volume: 48 ; Year: 2015 ; Issue: 1 ; Pages: 11-49

Classification and Topics

• Classification: Wirtschaft ; Institutions and the Macroeconomy ; Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems ; General Financial Markets: Government Policy and Regulation
• Subject: European Banking Union ; Single Supervisory Mechanism ; Single Resolution Mechanism ; risk sharing

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Buch, Claudia M. ; Körner, Tobias ; Weigert, Benjamin
• Event: Veröffentlichung
• (who): Duncker & Humblot
• (where): Berlin
• (when): 2015

Further information

• DOI: doi:10.3790/ccm.48.1.11
• Last update: 10.03.2025, 11:44 AM CET