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From supervision to resolution: next steps on the road to European banking union


  • Nicolas Véron
  • Guntram B. Wolff


Listen to the press conference call. The European Council has outlined the creation of a Single Resolution Mechanism (SRM), complementing the Single Supervisory Mechanism. The thinking on the SRM’s legal basis, design and mission is still preliminary and depends on other major initiatives, including the European Stability Mechanism’s involvement in bank recapitalisations and the Bank Recovery and Resolution (BRR) Directive. The SRM should also not be seen as the final step creating Europe’s future banking union. Both the BRR Directive and the SRM should be designed to enable the substantial financial participation of existing creditors in future bank restructurings. To be effective, the SRM should empower a central body. However, in the absence of Treaty change and of further fiscal integration, SRM decisions will need to be implemented through national resolution regimes. The central body of the SRM should be either the European Commission, or a new authority. This legislative effort should not be taken as an excuse to delay decisive action on the management and resolution of the current European banking fragility, which imposes a major drag on Europe’s growth and employment.

Suggested Citation

  • Nicolas Véron & Guntram B. Wolff, 2013. "From supervision to resolution: next steps on the road to European banking union," Policy Contributions 771, Bruegel.
  • Handle: RePEc:bre:polcon:771

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    References listed on IDEAS

    1. Jean Pisani-Ferry & André Sapir & Nicolas Véron & Guntram B. Wolff, 2012. "What kind of European banking union?," Policy Contributions 731, Bruegel.
    2. Chiara Angeloni & Guntram B. Wolff, 2012. "Are banks affected by their holdings of government debt?," Working Papers 717, Bruegel.
    3. Rishi Goyal & Petya Koeva Brooks & Mahmood Pradhan & Thierry Tressel & Giovanni Dell'Ariccia & Ceyla Pazarbasioglu, 2013. "A Banking Union for the Euro Area," IMF Staff Discussion Notes 13/01, International Monetary Fund.
    4. Adam Posen & Nicolas Véron, 2009. "A solution for Europe's banking problem," Policy Briefs 310, Bruegel.
    5. Jean Pisani-Ferry & Guntram B. Wolff, 2012. "The fiscal implications of a banking union," Policy Briefs 748, Bruegel.
    6. Guntram B. Wolff, 2011. "The Euro area's macroeconomic balancing act," Policy Contributions 555, Bruegel.
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    Cited by:

    1. Jean Pisani-Ferry & André Sapir & Guntram B. Wolff, . "EU-IMF assistance to euro area countries: an early assessment," Blueprints, Bruegel, number 779, August.
    2. Arnould, Guillaume & Dehmej, Salim, 2016. "Is the European banking system robust? An evaluation through the lens of the ECB׳s Comprehensive Assessment," International Economics, Elsevier, vol. 147(C), pages 126-144.
    3. repec:agr:journl:v:xxiv:y:2017:i:1(610):p:291-298 is not listed on IDEAS
    4. Edwin M. Truman, 2013. "Asian and European Financial Crises Compared," Working Paper Series WP13-9, Peterson Institute for International Economics.
    5. Nicolas Véron, 2013. "A realistic bridge towards European banking union," Policy Contributions 783, Bruegel.
    6. Maylis Avaro & Henri Sterdyniak, 2014. "Banking union: a solution to the euro zone crisis?," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 193-241.
    7. Jörg Bibow, 2013. "Lost at Sea:The Euro Needs a Euro Treasury," FMG Special Papers sp227, Financial Markets Group.
    8. Trichet, Jean-Claude, 2013. "International policy coordination in the Euro area: Toward an economic and fiscal federation by exception," Journal of Policy Modeling, Elsevier, vol. 35(3), pages 473-481.
    9. Jorg Bibow, 2013. "Lost at Sea: The Euro Needs a Euro Treasury," Economics Working Paper Archive wp_780, Levy Economics Institute.
    10. Andrei HREBENCIUC, 2017. "Banking Union framework and the stability of the European Banking sector," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(610), S), pages 291-298, Spring.
    11. Zsolt Darvas & Guntram B. Wolff, 2013. "Should Non-Euro Area Countries Join the Single Supervisory Mechanism?," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 2, pages 141-163, June.
    12. Jörg Bibow, 2013. "Lost at Sea: The Euro Needs a Euro Treasury," IMK Studies 35-2013, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    13. Jeżowski Mirosław, 2015. "Design and Factors Affecting State Supervision of the Financial Market," Management and Business Administration. Central Europe, De Gruyter Open, vol. 23(1), pages 113-129, March.

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