Europe's banking union at ten: Unfinished yet transformative

Europe's banking union, the project to pool responsibility for prudential policy at the European Union level, became a reality in 2014 with the empowerment of the European Central Bank (ECB) as banking supervisor. Ten years on, the project remains unfinished, as European countries can still leverage their domestic banking sectors to serve their special interests, and the intervention framework for banking crises continues to be an awkward mix of national and EU authorities and instruments. But the achievements of even this incomplete banking union have been impressive. The decision on ECB banking supervision, made in mid-2012, was crucial for the eventual resolution of the euro area crisis. The subsequent decade of supervisory practice appears to have been successful, meeting its objectives of banking system safety and soundness. Still, Europe pays a high price for its reluctance to finish the work. This paper offers a comprehensive exploration of the genesis, implementation, and possible future completion of this major policy endeavor.