IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/21762.html

To be or not to be in Banking Union

Author

Listed:
  • Dellas, Harris
  • Papageorgiou, Dimitris

Abstract

Banking Union (BU) membership comes with costs, such as foregoing the ability to tailor domestic banking regulation to the country’s needs and preferences; and benefits, such as a more efficient provision of deposit insurance. We use a general equilibrium model that features a rich financial sector, risk shocks, optimal bank capital regulation and government-provided deposit insurance to evaluate the implications of BU membership for welfare, macroeconomic activity and financial stability. BU participation is favored by a riskier and more consequential —for economic activity — banking sector. Nevertheless, there are cases of welfare improving membership that are not associated with higher and more stable macroeconomic performance and financial stability.

Suggested Citation

  • Dellas, Harris & Papageorgiou, Dimitris, 2026. "To be or not to be in Banking Union," CEPR Discussion Papers 21762, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:21762
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP21762
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:21762. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CEPR (email available below). General contact details of provider: https://cepr.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.