National interests and supranational resolution in the European Banking Union

Tobias Tröger () and Anastasia Kotovskaia

No 340, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: We investigate whether the bank crisis management framework of the European banking union can effectively bar the detrimental influence of national interests in cross-border bank failures. We find that both the internal governance structure and decision making procedure of the Single Resolution Board (SRB) and the interplay between the SRB and national resolution authorities in the implementation of supranationally devised resolution schemes provide inroads that allow opposing national interests to obstruct supranational resolution. We also show that the Single Resolution Fund (SRG), even after the ratification of the reform of the European Stability Mechanism (ESM) and the introduction of the SRF backstop facility, is inapt to overcome these frictions. We propose a full supranationalization of resolution decision making. This would allow European authorities in charge of bank crisis management to operate autonomously and achieve socially optimal outcomes beyond national borders.

Keywords: SRB; SRF; bank resolution; banking union; bail-in; ESM; national interest; political economy; bureaucrats' incentives (search for similar items in EconPapers)
JEL-codes: G01 G18 G21 G28 K22 K23 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-ban and nep-eec
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/250047/1/1788879961.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewp:340

DOI: 10.2139/ssrn.4024343

Access Statistics for this paper

More papers in SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().