EU BANKING UNION – RECENT DEVELOPMENTS

Petre Prisecaru

Impact of Socio-economic and Technological Transformations at National, European and International Level (ISETT), 2016, vol. 12

Abstract: Measures to ensure the financial stability have contributed to a certain financial disintegrationwithin the Economic and Monetary Union (EMU), and currently still serious obstacles persist toremoving the fragmentation of the European financial system. The banking union was conceived as aprocess based on three pillars or components: a Single Supervision Mechanism (SSM), a SingleResolution Mechanism (SRM), and a harmonized system of deposit guarantee schemes. Whilelegislative and institutional construction has advanced rapidly on the first two pillars, there are someshortcomings regarding the harmonization of schemes on the third pillar. Our research aims topresent, through a qualitative analysis, the latest developments on the banking union, and highlightboth progress and the main obstacles that hinder its completion. In our opinion, one of the mainimpediments to achieving a full-fledged banking union is that European banks are faced with thedilemma of increasing assets by augmenting debt based on bonds, or by issuing shares in a period ofsevere decline in the quotations of financial instruments.

Keywords: Economic and Monetary Union (EMU); supervision; resolution; stress tests; deposit guarantee; bonds; shares; capital; assets (search for similar items in EconPapers)
JEL-codes: E44 E58 F36 G01 G21 G28 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:iem:imptrs:v:12:y:2016:id:2822000009619019

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