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The Banking Union - The Solution To Reduce The European Banking System Risks?

Author

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  • Alina Ligia Dumitrescu

    (Department of European Integration Governance, Institute for World Economy, Bucharest, ROMANIA)

Abstract

The banking union has been seen as "a panacea" for solving the system risks of the EU banking system. This paper objectives are to find out if is the banking union, with is strong and week sides, will be right answer to solve the actual issues that EU banking system has as: the fragmentation in the EU single market, the deterioration in asset quality, the need for recapitalization and the quality of banks’ loan portfolios. According with most of the experts the banking union will strength the process of economic integration. On the other side, the non-euro area member states are questioning about "equal rights and obligations for all Member States" inside the banking union. But, with all pros and cons of the banking union, the ECB's making decisions and tasks can be questioned, although its role of supervisor can not be disputed. The most important thing is that the banking union breaks the vicious circle between banks and sovereign debts, and ends "to big to fail".

Suggested Citation

  • Alina Ligia Dumitrescu, 2014. "The Banking Union - The Solution To Reduce The European Banking System Risks?," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 2(2), pages 42-47, November.
    • Handle: RePEc:ntu:ntugeo:vol2-iss2-14-042
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    References listed on IDEAS

    as
    1. International Monetary Fund, 2013. "Nigeria: Publication of Financial Sector Assessment Program Documentation––Technical Note on Stress Testing," IMF Staff Country Reports 2013/141, International Monetary Fund.
    2. International Monetary Fund, 2013. "European Union: Publication of Financial Sector Assessment Program Documentation—Technical Note on Progress with Bank Restructuring and Resolution in Europe," IMF Staff Country Reports 2013/067, International Monetary Fund.
    3. International Monetary Fund, 2013. "European Union: Publication of Financial Sector Assessment Program Documentation—Technical Note on Macroprudential Oversight and the Role of the ESRB," IMF Staff Country Reports 2013/070, International Monetary Fund.
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    Cited by:

    1. Mariana PAJA, 2015. "Strengthening the Romanian Banking System Effects of Joining the Banking Union," Economics of Sustainable Development.The Economic Impact of Climate Change. - Working papers 07, Ecological University of Bucharest, Department of Economics.

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    More about this item

    Keywords

    Banking union; risks; integration; supervision; regulations; institutions;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G - Financial Economics
    • G2 - Financial Economics - - Financial Institutions and Services

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