Abstract
Establishing a Banking Union was a rallying issue in the European Union the last years. In the December 2012 Summit it was decided to set up a Banking Union that will streamline and standardize procedures in the eurozone across banking system and prevent national debt crisis that affects the common currency. At least 200 large and multinational banks will be placed under a Single Supervisory authority controlled by the European Central Bank and if needed it will be empowered to monitor all 6000 banking in the European Union. The scope of this paper is to present briefly the progress towards the Banking Union agreement and to sketch a preliminary exercise program of the Hellenic Banks’ adaptation, rescheduling and recapitalization needs. Bank of Greece estimated that the amount of €50 billion earmarked under the Economic Adjustment Programme is appropriate to cover the Greek banking sector’s recapitalization and restructuring costs. Therefore, banks’ institutional and private shareholders will be required by July 2013 to cover a minimum of 10% of new common equity capital as to keep credit institutions privately run. Still, there is no agreed time schedule on banks’ recapitalization.
Highlights
The European crisis has exposed the lack of institutional mechanisms to deal with macroeconomic shocks
The scope of this paper is to present briefly the progress towards the Banking Union agreement and to sketch a preliminary exercise program of the Hellenic Banks’ adaptation, rescheduling and recapitalization needs
The scope of this paper is to present briefly the progress towards the Banking Union agreement, the initial considerations before and after the June and December 2012 historical Summits, as well as, to sketch a preliminary exercise program of the Hellenic Banks’ adaptation, rescheduling and recapitalization needs
Summary
The European crisis has exposed the lack of institutional mechanisms to deal with macroeconomic shocks. The concept of the European Banking Union was put forward by the European Heads of State and Government on 23 May 2012 as a key component for solving the euro area economic and fiscal crisis. The European Commission envisaged a European Banking Union on three main pillars: a) a Single Supervision Mechanism, covering all banks b) a European Deposit Insurance Scheme, and c) a Common Resolution System. Article 127 TFEU provides for the European System of Central Banks (ESCB) to intervene in maintaining price stability and support general economic policies in the Union while para 3 provides for the power to the ESM (after prior consultation of the Commission, the Council and the European Parliament) to undertake the prudential supervision of all EU credit and other financial institutions. The scope of this paper is to present briefly the progress towards the Banking Union agreement, the initial considerations before and after the June and December 2012 historical Summits, as well as, to sketch a preliminary exercise program of the Hellenic Banks’ adaptation, rescheduling and recapitalization needs
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
