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Can Banking Union foster market integration, and what lessons does that hold for capital markets union?

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Listed:
  • Angeloni, Ignazio
  • Haselmann, Rainer
  • Heider, Florian
  • Pelizzon, Loriana
  • Schlegel, Jonas
  • Tröger, Tobias

Abstract

Over the past decade, the Single Supervisory Mechanism focused on making banks safer, resulting in stronger banks but limited euro area cross-border integration. We argue that overbanking hinders both cross-border integration for the EU and the development and integration of capital markets. In addition to a common supervisory authority and to attain the strong and integrated financial system Europe needs going forward, the Banking Union and Capital Markets Union need to coexist and complement each other. This document was provided/prepared by the Economic Governance and EMU Scrutiny Unit at the request of the ECON Committee.

Suggested Citation

  • Angeloni, Ignazio & Haselmann, Rainer & Heider, Florian & Pelizzon, Loriana & Schlegel, Jonas & Tröger, Tobias, 2024. "Can Banking Union foster market integration, and what lessons does that hold for capital markets union?," SAFE White Paper Series 107, Leibniz Institute for Financial Research SAFE.
    • Handle: RePEc:zbw:safewh:304307
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    References listed on IDEAS

    as
    1. Heider, Florian & Krahnen, Jan Pieter & Langenbucher, Katja & Lindner, Vincent & Schlegel, Jonas & Tröger, Tobias, 2024. "The geopolitical case for CMU and two different pathways toward capital market integration," SAFE White Paper Series 102, Leibniz Institute for Financial Research SAFE.
    2. Martín Fuentes, Natalia & Di Vito, Luca & Leite, João Matos, 2023. "Understanding the profitability gap between euro area and US global systemically important banks," Occasional Paper Series 327, European Central Bank.
    3. Levine, Ross, 2002. "Bank-Based or Market-Based Financial Systems: Which Is Better?," Journal of Financial Intermediation, Elsevier, vol. 11(4), pages 398-428, October.
    4. Haselmann, Rainer & Krahnen, Jan Pieter & Tröger, Tobias & Wahrenburg, Mark, 2022. "Institutional protection schemes: What are their differences, strengths, weaknesses, and track records?," SAFE White Paper Series 88, Leibniz Institute for Financial Research SAFE.
    5. Haselmann, Rainer & Sarkar, Arkodipta & Singla, Shikhar & Vig, Vikrant, 2022. "The political economy of financial regulation," LawFin Working Paper Series 45, Goethe University, Center for Advanced Studies on the Foundations of Law and Finance (LawFin).
    6. Jan Friedrich & Matthias Thiemann, 2017. "Capital Markets Union: The Need for Common Laws and Common Supervision," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 86(2), pages 61-75.
    7. Feng, Guohua & Wang, Chuan, 2018. "Why European banks are less profitable than U.S. banks: A decomposition approach," Journal of Banking & Finance, Elsevier, vol. 90(C), pages 1-16.
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    More about this item

    Keywords

    Banking Union; Capital Markets Union; Market Integration; Overbanking;
    All these keywords.

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