Should Non-Euro Area Countries Join the Single Supervisory Mechanism?

Zsolt Darvas and Guntram Wolff

DANUBE: Law and Economics Review, 2013, issue 2, 141-163

Abstract: Irrespective of the euro crisis, a European banking union makes sense, including for non-euro area countries, because of the extent of European Union financial integration. The Single Supervisory Mechanism (SSM) is the first element of the banking union. From the point of view of non-euro countries, the draft SSM regulation as amended by the EU Council includes strong safeguards relating to decision-making, accountability, attention to financial stability in small countries and the applicability of national macroprudential measures. Non-euro countries will also have the right to leave the SSM and thereby exempt themselves from a supervisory decision. The SSM by itself cannot bring the full benefits of the banking union, but would foster financial integration, improve the supervision of cross-border banks, ensure greater consistency of supervisory practices, increase the quality of supervision, avoid competitive distortions and provide ample supervisory information. While the decision to join the SSM is made difficult by uncertainty surrounding other elements of the banking union, including possible burden sharing, we conclude that non-euro EU members should stand ready to join the SSM and be prepared for negotiations on the other elements of the banking union.

Keywords: Euro Crisis; European Banking Union; Bank Supervision; Single Supervisory Mechanism (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://www.eaco.eu/wp-content/uploads/2015/04/darvas.pdf (application/pdf)

Related works:
Working Paper: Should non-euro area countries join the single supervisory mechanism? (2013)
Working Paper: Should Non-Euro Area Countries Join the Single Supervisory Mechanism? (2013)
Working Paper: Should non-euro area countries join the single supervisory mechanism? (2013)
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:cmn:journl:y:2013:i:2:p:141-163

Access Statistics for this article

More articles in DANUBE: Law and Economics Review from European Association Comenius - EACO
Bibliographic data for series maintained by Helena Campbelle ().