How Can a Banking Union Make the EU More Resilient to Crises?

Summary, in English

This chapter examines if and how the yet-incomplete European Banking Union can make the EU more resilient to crises. Key experiences from the financial and sovereign debt crises, and the EU’s new bank regulatory framework and the components of the Banking Union, are summarised. An overview of how European banking sectors have developed since the previous crises is also provided. The current regulatory framework is analysed in light of the literature on financial safety nets, focussing on the existing Banking Union components of common supervision and bank resolution as well as the intended but not yet implemented, component of common deposit insurance. It finds that resilience gains from completing the Banking Union are likely to be considerable, but that credibility for the existing components also needs strengthening. The chapter concludes by reviewing the main obstacles to the completion of the Banking Union and discussing prospects for a political breakthrough.

• Author: Jens Forssbaeck
• Editor: Antonina Bakardjieva Engelbrekt; Per Ekman; Anna Michalski; Lars Oxelheim
• Department/s: Department of Economics
• Publishing year: 2022
• Language: English
• Pages: 141-167
• Publication/Series: Routes to a Resilient European Union
• Links: http://dx.doi.org/10.1007/978-3-030-93165-0_7
• Document type: Book chapter
• Publisher: Palgrave Macmillan
• Topic: Economics
• Keywords: European Banking Union; Bank regulation; Bank supervision; Bank resolution; Risk-sharing; Financial crises; Deposit insurance
• Status: Published
• ISBN/ISSN/Other: ISBN: 978-3-030-93164-3; ISBN: 978-3-030-93165-0