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Banking Union: Time Is Not On Our Side

Author

Listed:
  • Adrien Béranger
  • Jézabel Couppey Soubeyran
  • Laurence Scialom

Abstract

This paper reviews the various mechanisms and rules that has been proposed to build a banking union in Europe. We argue that the banking union is a promising solution to the Eurozone crisis because it completes the unification of the Euro currency, forms a solution to both the financial and monetary fragmentation of the Euro area financial markets and helps breaking the vicious circle created by domestic banking system impairments and the sovereign debt crisis. We underline not only the shortcomings and hurdles to reach a fully-fledged banking union, and the hazards created by the inconsistencies between their phasing-in in the sequential schedule decided by states. To reduce the loopholes induced by the sequential approach, we propose to implement a rule of shared-bailout during the transition period that consist in a loss-sharing rule among countries hosting an entity of a bank group and indicted in the living wills of the systemic banking companies

Suggested Citation

  • Adrien Béranger & Jézabel Couppey Soubeyran & Laurence Scialom, 2014. "Banking Union: Time Is Not On Our Side," EconomiX Working Papers 2014-38, University of Paris Nanterre, EconomiX.
  • Handle: RePEc:drm:wpaper:2014-39
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    File URL: http://economix.fr/pdf/dt/2014/WP_EcoX_2014-39.pdf
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    References listed on IDEAS

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    1. Laurence Scialom & Michel Aglietta, 2003. "The Challenge of European Integration for Prudential Policy," FMG Special Papers sp152, Financial Markets Group.
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    More about this item

    Keywords

    Eurozone; banking union; bank supervision; resolution;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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