Cross-border resolution of failed banks in the EU: A search for the second-best policies
AbstractThis paper analyzes the reasons for the failure of the multilateral resolution of EU cross-border banks such as Fortis. We argue that the pre-crisis regime based on soft law and voluntary coordination was unable to align the incentives of national authorities acting under the time pressure and uncertainty of a banking crisis. We ask whether this experience induced the Commission to propose reforms that would close the regulatory gap between integrated cross-border banks and national resolution regimes. Although, the Commission proposals submitted within a year of the crisis considered the more radical reform options, such as shifting the regime to the EU level or reorganizing cross-border banks so that they could be resolved on the national level, in the end the Commission supported the traditional reform path of deepening soft law and strengthening pre-crisis governance arrangements. At the same time, the new financing mechanisms introduced to stabilize the Eurozone can pave the way for the introduction of an EU-level bank resolution regime, when the next reform opportunity arises.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute for European integration research (EIF) in its series Working Papers of the Vienna Institute for European integration research (EIF) with number 8.
Date of creation: 15 Nov 2010
Date of revision:
Contact details of provider:
Web page: http://www.eif.oeaw.ac.at
political science; European Commission;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-19 (All new papers)
- NEP-BAN-2011-02-19 (Banking)
- NEP-CIS-2011-02-19 (Confederation of Independent States)
- NEP-EEC-2011-02-19 (European Economics)
- NEP-EUR-2011-02-19 (Microeconomic European Issues)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jean Pisani-Ferry & André Sapir, 2010.
"Banking crisis management in the EU: an early assessment,"
CEPR & CES & MSH, vol. 25, pages 341-373, 04.
- Pisani-Ferry, Jean & Sapir, André, 2010. "Banking crisis management in the EU: an early assessment," Economics Papers from University Paris Dauphine 123456789/12379, Paris Dauphine University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maria Duftner) The email address of this maintainer does not seem to be valid anymore. Please ask Maria Duftner to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.