Three Reasons for the European Banking Union

Angelo Baglioni

Chapter Chapter 2 in The European Banking Union, 2016, pp 7-29 from Palgrave Macmillan

Abstract: Abstract This book starts by examining the reasons behind the introduction of the European banking union. This chapter documents the fiscal cost of the financial crisis that started in 2007, which has been the main driver, inducing the eurozone governments to assign the ECB the task of implementing tough and uniform standards of supervision. The declared target of the policymakers is to break the vicious circle between bank and sovereign risks; this two-way link emerges by looking at the market price of risk for the two sectors. Finally, the chapter shows the need for a supervisory convergence among the European countries and for a common framework for resolving distressed banks.

Keywords: Financial crisis; Bailout; Sovereign risk; Supervisory convergence (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-1-137-56314-9_2

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DOI: 10.1057/978-1-137-56314-9_2

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