Banking Union: Time Is Not On Our Side

Adrien Béranger, Jézabel Couppey Soubeyran and Laurence Scialom ()
Authors registered in the RePEc Author Service: Jézabel Couppey-Soubeyran

No 2014-38, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: This paper reviews the various mechanisms and rules that has been proposed to build a banking union in Europe. We argue that the banking union is a promising solution to the Eurozone crisis because it completes the unification of the Euro currency, forms a solution to both the financial and monetary fragmentation of the Euro area financial markets and helps breaking the vicious circle created by domestic banking system impairments and the sovereign debt crisis. We underline not only the shortcomings and hurdles to reach a fully-fledged banking union, and the hazards created by the inconsistencies between their phasing-in in the sequential schedule decided by states. To reduce the loopholes induced by the sequential approach, we propose to implement a rule of shared-bailout during the transition period that consist in a loss-sharing rule among countries hosting an entity of a bank group and indicted in the living wills of the systemic banking companies

Keywords: Eurozone; banking union; bank supervision; resolution (search for similar items in EconPapers)
JEL-codes: E58 G21 G28 H12 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2014
New Economics Papers: this item is included in nep-ban, nep-cba, nep-eec, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2014-39

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