Abstract
Set up in the past few years under the shadow of the Euro debt crisis, the European Banking Union (EBU) has been taking its first steps, aiming to prevent the dreaded repetition of the recent shortcomings of the several components of the European Monetary Union (EMU). By revisiting some specific events that led to the Euro crisis, this paper seeks to provide some insights on the understanding of the set-up of the Single Supervisory Mechanism (SSM), in the context of the broader conjunction of the several instruments put forward to provide the EBU with the resilience to prevent future crises. The text provides a brief background of the events that triggered the need for setting up the EBU, followed by an overview of its different constitutive elements and, finally, a critical analysis of the most prominent aspects of the SSM.
Highlights
Set up in the past few years under the shadow of the Euro debt crisis, the European Banking Union (EBU) has been taking its first steps, aiming to prevent the dreaded repetition of the recent shortcomings of the several components of the European Monetary Union (EMU)
By revisiting some specific events that led to the Euro crisis, this paper seeks to provide some insights on the understanding of the set-up of the Single Supervisory Mechanism (SSM), in the context of the broader conjunction of the several instruments put forward to provide the EBU with the resilience to prevent future crises
The Euro debt crisis, a perfect storm of unforeseen proportions that followed a global financial crisis,[1] took over media attention during the last decade, and the responses designed to address it, in the context of an EU unprepared to face its outcomes and implications,[2] have given strength for further steps to be taken in order to deepen the European Monetary Union (EMU), a problematic affair in itself.[3]
Summary
The Euro debt crisis, a perfect storm of unforeseen proportions that followed a global financial crisis,[1] took over media attention during the last decade, and the responses designed to address it, in the context of an EU unprepared to face its outcomes and implications,[2] have given strength for further steps to be taken in order to deepen the European Monetary Union (EMU), a problematic affair in itself.[3] This was the backdrop for the set up of the European Banking Union (EBU), a fish out of water originally submerged in a legal territory bounded by EU Treaty constraints that would predictably struggle to adjust to the political environment of the last few years, and whose success will necessarily depend on its capacity to help stabilize the Euro area and prevent the reversal of persistent and long lasting trends towards fragmentation and renationalization of financial markets. The banking union was explicitly set up as an instrument to “break the vicious cycle between banks and sovereigns”,10 since the potential for mutual reinforcement between financial and sovereign crises had already been acknowledged.[11]
Sign-in/Register to view highlights & summary 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 callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
