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The European Banking Union: Will it be Sufficient to Avert another Debt Crisis in Europe?

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  • Ross Alexander Spence

    (The University of Edinburgh.)

Abstract

The European Banking Union came into existence to help address crucial problems caused by the global financial crisis and subsequent European sovereign debt crisis. In order to reinstate stability and credibility back into the European banking system, a stronger and more centralized set of criteria was required, to avert another debt crisis in Europe. Whether the EBU is sufficient, however, remains to be seen. Nonetheless, The EBU is a significant step towards a genuine Economic and Monetary Union. It enables the application of consistent banking rules, with new tools and procedures designed to result in a more unified, transparent and safer marketplace for banks. The EBU currently has two functioning pillars consisting of the SSM and SRM respectively. A third pillar, although not yet operational, is in the pipeline in the form of the European Deposit Insurance Scheme. These pillars are underpinned by the Single Rulebook, which provides administrative and legal standards to ensure the efficient distribution of supervision, regulation and governance procedures.

Suggested Citation

  • Ross Alexander Spence, 2016. "The European Banking Union: Will it be Sufficient to Avert another Debt Crisis in Europe?," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 6(11), pages 15-33, November.
    • Handle: RePEc:mir:mirbus:v:6:y:2016:i:11:p:15-33
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    References listed on IDEAS

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    1. Schoenmaker, Dirk, 2011. "The financial trilemma," Economics Letters, Elsevier, vol. 111(1), pages 57-59, April.
    2. David Howarth & Lucia Quaglia, 2014. "The Steep Road to European Banking Union: Constructing the Single Resolution Mechanism," Journal of Common Market Studies, Wiley Blackwell, vol. 52, pages 125-140, November.
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