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European Banking Union

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  • Fritz Breuss

Abstract

The ongoing Euro crisis and the worse economic development in Europe than in the USA are grounded, not the least in the delayed implementation of reforms of the banking sector. Whereas the leaks in economic governance of EMU have been fixed the banking sector is still not stabilised, even five years after Lehman Brothers. From the grand solution of a "European Banking Union" (EBU) only the first pillar, the European Bank Supervision with the single supervisory mechanism (SSM) will come into effect in 2014. The other necessary steps – the single resolution mechanism (SRM) and the single deposit guarantee mechanism (SDM) – will follow later. Until the "Europeanisation" will take place the bank recovery and resolution will be managed nationally based on EU law. A first evaluation indicates that the potential benefits of solving bank problems via the resolution mechanism of a new EBU would be distributed unequally between the member countries of the EU/Euro area. Germany would be the biggest loser, Spain and the Netherlands the biggest winners. Of the non-euro countries, the UK and Sweden have the most to gain, but Poland would lose. The country-specific gains of EBU depend on the number and size of banks which are located in a country. It is, however, not yet clear whether the goal of macroeconomic stabilising of bank resolutions would be better achieved when executed via the SRM or with the ESM, both for the countries affected and for the Euro area as a whole.

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  • Fritz Breuss, 2013. "European Banking Union," WIFO Working Papers 454, WIFO.
    • Handle: RePEc:wfo:wpaper:y:2013:i:454
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    File URL: https://www.wifo.ac.at/wwa/pubid/46952
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    References listed on IDEAS

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    1. Gros, Daniel, 2013. "Banking Union with a Sovereign Virus: The self-serving regulatory treatment of sovereign debt in the euro area," CEPS Papers 7904, Centre for European Policy Studies.
    2. Mayer, Thomas, 2013. "A Copernican turn in Banking Union urgently needed," CEPS Papers 8263, Centre for European Policy Studies.
    3. Schoenmaker, Dirk & Gros, Daniel, 2012. "A European Deposit Insurance and Resolution Fund," CEPS Papers 6918, Centre for European Policy Studies.
    4. Tonzer, Lena, 2015. "Cross-border interbank networks, banking risk and contagion," Journal of Financial Stability, Elsevier, vol. 18(C), pages 19-32.
    5. Schoenmaker, Dirk & Gros, Daniel, 2012. "A European Deposit Insurance and Resolution Fund - An Update," CEPS Papers 7684, Centre for European Policy Studies.
    6. Miriam Hartlapp & Christian Rauh, 2013. "The Commission’s internal conditions for social re-regulation: Market efficiency and wider social goals in setting the rules for financial services in Europe," European Journal of Government and Economics, Europa Grande, vol. 2(1), pages 25-40, June.
    7. Daniel Gros, 2013. "Banking union with a sovereign virus," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 48(2), pages 93-97, March.
    8. Fritz Breuss, 2012. "Towards a New EMU," WIFO Working Papers 447, WIFO.
    9. Fritz Breuss, 2012. "European Banking Union: Necessary, But Not Enough to Fix the Euro Crisis," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(04), pages 26-32, December.
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    Cited by:

    1. Fritz Breuss, 2013. "Europa als Global Player," WIFO Working Papers 455, WIFO.
    2. Vasile COCRIS & Igor TURCANU & Stanislav PERCIC, 2014. "Towards A European Banking Union: Risks And Challenges," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 14, pages 219-227, December.
    3. Fritz Breuss, 2015. "In Search of Growth in a Future with Diminished Expectations. The Case of Austria," WIFO Working Papers 493, WIFO.

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    Economic and Monetary Union Eurozone European integration Banking Union;

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