The European Banking Crisis Regulation. From the Regulatory Model to the Impact on the Italian Banking System

Abstract

This paper examines the impact of the European Resolution Mechanism on the Italian banking system by using a dual perspective: the complexity of the Banking Union and the effect of the bail-in rule in terms of bank resolution capability. The new rules entered into force when the prevention system was not yet in operation. The empirical analysis shows that in recent years the capacity to face a potential resolution by Italian banks has declined. However in 2016, resolution capacity grew rapidly to the highest level since 2008, increasing more according to the size of the bank.The analysis supports the aggregation of banks strategy and confirms a certain «heterogony of ends» of the European discipline.