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Banking union: Mind the gaps

Author

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  • Adrien Béranger
  • Laurence Scialom

Abstract

This paper reviews the various mechanisms and rules that have been proposed to create 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 zone financial markets and helps break the vicious cycle created by domestic banking system impairments and the sovereign debt crisis. We underline the shortcomings and hurdles to attaining a fully-fledged banking union, and the hazards created by the inconsistencies between the phasing-in of the sequential programme decided by European member states. Various suggestions are made to fill the gaps created by the current architecture: establishing a shared-bailout rule to absorb the remaining losses, simplifying the organisation of banking groups and creating a truly federal deposit insurance scheme.

Suggested Citation

  • Adrien Béranger & Laurence Scialom, 2015. "Banking union: Mind the gaps," International Economics, CEPII research center, issue 144, pages 95-115.
    • Handle: RePEc:cii:cepiie:2015-q4-144-6
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    Cited by:

    1. 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.

    More about this item

    Keywords

    Eurozone; Banking union; Bank supervision; Resolution;
    All these keywords.

    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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