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Tag Archives: banking union

Europe’s banking union should learn the right lessons from the US

In revived discussions on European banking union, some have suggested a new regime to deal with failing banks, alongside existing ones, drawn from parts of the United States’ bank resolution framework. This fragmented approach could be counterproductive. Europe should adopt a unitary regime, like the US, that applies to all banks irrespective of size. In late September, the European Union reiterated its members’ commitment to press on with the ambitious banking reform discussion begun before...

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The EU’s Opportunity to Turn Its Markets Toward the Future

Meeting the fiscal demands of COVID-19 will require the European Union to borrow on capital markets more than ever, and for European pension funds and households to look more widely for ways to build their nest eggs safely. The EU should take the challenges of the pandemic and Brexit as a chance to get its financial infrastructure house in order. By: Rebecca Christie Date: July 16, 2020 Topic: European Macroeconomics & Governance This article is based on a version first...

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Should Denmark and Sweden join the banking Union?

Though outside the euro area, Denmark and Sweden could benefit from joining the European Union’s banking union. It would provide protection in case of any need to resolve at national level a large bank with a Scandinavian footprint, and would mark a choice in favour of more cross-border banking. But joining the banking union would also involve some loss of decision-making power. An important policy discussion is ongoing in Denmark and Sweden on joining the European Union’s banking union....

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Mapping out the post COVID-19 recovery

COVID-19 has triggered a severe recession and policymakers in European Union countries are providing generous, largely indiscriminate, support to companies. As the recession gets deeper, a more comprehensive strategy is needed. This should be based on four principles: viability of supported entities, fairness, achieving societal goals, and giving society a share in future profits. The effort should be structured around equity and recovery funds with borrowing at EU level. By: The Sound of...

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Save markets to save the single market

It’s time for the EU to make quick and indispensable progress in forming a capital markets union. By: Maria Demertzis Date: May 15, 2020 Topic: European Macroeconomics & Governance Necessary though it was, the temporary relaxation of state aid rules in the EU has brought grave unintended consequences. Through indiscriminate support, the EU is rapidly moving from an even playing field that promotes the “survival of the fittest” to a situation where only those with the “richest...

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Can the European Green Deal kill the single market?

The European Green Deal is one of the landmarks of Ursula von der Leyen's Commission. But, without an ambitious investment behind it, what could be its potential implications for the EU? Could it go as far as to threaten the EU's single market? This week, Renew Europe's vice-president, MEP Luis Garicano, joins Guntram Wolff and Maria Demertzis to discuss not only the European Green Deal but also the EU Budget and the Banking Union. Disclaimer: this episode was recorded on the 20th of...

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European capital markets union, by rule and by choice

While the euro is now a leading global currency and the European Central Bank has become a comprehensive banking supervisor, Europe’s markets have been treading water. By: Rebecca Christie Date: January 23, 2020 Topic: Finance & Financial Regulation Europeans in the 21st century are used to freely living, working and spending money across borders. But when it comes to banking and investing, their main options are strictly close to home.Despite adopting a common currency and...

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Crisis management for euro-area banks in central Europe

Euro-area bank integration has decreased as post-financial crisis national rules require banks to hold more capital at home. It might be undermined further by bank resolution planning. Either a Single Resolution Board takes the lead for the entire banking group or independent local intervention schemes need to be developed for crisis resolution. By: Alexander Lehmann Date: November 19, 2019 Topic: European Macroeconomics & Governance The deep involvement of a number of euro-area...

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Scholz’s improved plan to complete the banking union

The head of German Finance has written in the 'Financial Times' defending the need to deepen the banking union, now London is about to leave By: Rebecca Christie Date: November 8, 2019 Topic: European Macroeconomics & Governance Germany’s finance minister wrote an op-ed to praise the idea of pan-European deposit insurance, but if this is progress, it’s only the start of the debate.Olaf Scholz wrote in the Financial Times of an “undeniable” need to deepen the euro area banking...

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Croatia’s path into the banking union

Croatia seems a suitable candidate for euro area accession: there is a tight peg to the euro, high public debt is coming down, and the banking sector is already dominated by euro area banks. But the Eurogroup has rightly targeted reforms of the state’s role in the economy as a precondition for participation in ERM II and the banking union. None of the announced reform plans are new or easily concluded within the timeframe that has now been agreed. By: Alexander Lehmann Date:...

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