 (When) should a non-euro country join the banking union?Ansgar Belke, Anna Dobrzańska, Daniel Gros and Paweł Smaga The Journal of Economic Asymmetries, 2016, vol. 14, issue PA, 4-19 Abstract: We analyze the benefits and costs of a non-euro country opting-in to the banking union. The decision to opt-in depends on the comparison between the assessment of the banking union attractiveness and the robustness of a national safety net. The benefits of opting-in are for now only potential and uncertain, while costs are more tangible. Due to treaty constraints, non-euro countries participating in the banking union will not be on equal footing with euro area members. Analysis points out that reducing the weaknesses of the banking union and thus providing incentives for opting-in is not probable in the short term, mainly due to political constraints. Until a fully-fledged banking union with well-capitalized backstops is established it may be optimal for a non-euro country to join the banking union upon the euro adoption. Assessing first experiences with the functioning of the banking union and opt-in countries will be crucial for non-euro countries when deciding whether to opt-in. Keywords: Banking union; Resolution; Supervision; ECB; Financial stability (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:joecas:v:14:y:2016:i:pa:p:4-19 DOI: 10.1016/j.jeca.2016.07.008 Access Statistics for this article The Journal of Economic Asymmetries is currently edited by A.G. Malliaris More articles in The Journal of Economic Asymmetries from Elsevier |
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