The input of Greek European policy in the formation of the Banking Union

2020

Banking Union represents one of the most important developments in European integration since the launch of Monetary Union. Furthermore, the design of the Banking Union agreed between 2012 and 2014 was a messy compromise among European Union (EU) member states. It is not surprising then that Banking Union has sparked a lively academic debate and triggered an ever-growing number of publications from different disciplinary backgrounds. This edited volume is located at the intersection of two major waves of academic research on Banking Union. The first wave of academic work focuses upon the economic rationale underpinning the supranationalisation of control over banking-regulation, supervision, support and resolution-and the political dynamics and legal issues that shaped the design of the Banking

Munich Personal RePEc Archive No 62463, 2015

The rising delinquencies in the U.S. subprime mortgage market in 2006 and the succeeding collapse in housing prices had a considerably negative impact on the functioning of the European financial systems and the smooth operation of European economies. Indeed, in the Euro-area, what started as a financial crisis escalated to a twin crisis after being doubled by the eruption of a massive sovereign debt crisis in 2010. The lack of an established set of bank supervision and resolution strategies at the Euro-area level, the vicious circle between banks and European nation-states, the threats for the sustainability of the common currency, and the deterioration of the market conditions were the key factors which lately led to the acceleration of the steps towards the creation of a banking union in Europe. The principal aim of the European Banking Union is to shape the necessary legal and institutional framework and provide the authorities with powers and tools to deal with ailing banks in order to prevent the devastating effects that a future shock may have on the financial system, the real economy, and the society. This paper presents the formal reactions of the sovereigns and the European Central Bank to the twin crisis, and critically discusses the key problems and the inherent weaknesses which led to the establishment of a banking union for the Euro-area member states. The structure of the banking union, the various aspects of its operation, and its future prospects are also presented and discussed.

1998

Is Greece a reforming economy? The purpose of this paper is to present theevolution and structure of the banking sector in Greece, with reference to theparallel experiences of the Eastern European (EE) countries. In Section 2, we areconcerned with the domestic economic environment within which the Greek Banking System (GBS) operates. and the pressures building up within the systemencouraging reform. In Section 3, we look into the evolution of the Greek BankingSystem, both in terms of structures and in terms of policy. Changes in theinstruments of monetary policy are also considered in this section. In Section 4, wepresent the case of the Hellenic Industrial Development Bank, currently undergoinga thorough restructuring plan. In Section 5, we examine some of the main similaritiesand differences between Greece and the EE countries in relation to banking sectorproblems and reform

2020

Banking Union represents one of the most important developments in European integration since the launch of Monetary Union. Furthermore, the design of the Banking Union agreed between 2012 and 2014 was a messy compromise among European Union (EU) member states. It is not surprising then that Banking Union has sparked a lively academic debate and triggered an ever-growing number of publications from different disciplinary backgrounds. This edited volume is located at the intersection of two major waves of academic research on Banking Union. The first wave of academic work focuses upon the economic rationale underpinning the supranationalisation of control over banking-regulation, supervision, support and resolution-and the political dynamics and legal issues that shaped the design of the Banking

2014

After the adoption of a single monetary policy which commits the European Central Bank to maintaining the euro’s purchasing power and price stability in the Eurozone, the European Union is facing a new, but equally fundamental challenge: the implementation in a relatively short time of the so-called “Banking Union”. Its purpose is twofold: (1) breaking the link between banking and sovereign risk, with the ultimate goal of achieving full protection of EU savers in the event of a crisis; and (2) ensuring uniformity of credit conditions - which are still too fragmented - within the European banking market, to ensure greater EU integration of the financial system. Starting from the communication in which the European Commission stressed the need for a banking union, this paper intends to explore the complex process towards its establishment by looking at the EU institutional mechanisms and the legal aspects. In particular, the analysis will be based on two building blocks: (1) the Singl...

2012

The Spanish Review of Financial Economics, 2015

Banking union is the most ambitious European project undertaken since the introduction of the single currency. It was launched in the summer of 2012, in order to send the markets a strong signal of unity against a looming financial fragmentation problem that was putting the euro on the ropes. The main goal of banking union is to resume progress towards the single market for financial services and, more broadly, to preserve the single market by restoring the proper functioning of monetary policy in the eurozone through restoring confidence in the European banking sector. This will be achieved through new harmonised banking rules and stronger systems for both banking supervision and resolution, that will be managed at the European level. The EU leaders and co-legislators have been working against the clock to put in place a credible and effective set-up in record time, amid intense negotiations (with final deals often closed at the last minute) and very significant concessions by all parties involved (most of which would have been simply unthinkable just a few years ago). Despite the fact that the final set-up does not provide for the optimal banking union, we still hold to its extraordinary political value and see its huge potential. By putting Europe back on the right integration path, banking union will restore the momentum towards a genuine economic and monetary union. Nevertheless, in order to put an end to the sovereign/banking loop, further progress in integration is needed including key fiscal, economic and political elements.

Journal of Banking Regulation, 2016

International actors promoted the transfer of regulatory authority and financial resources from national governments to the European Union in the context of establishing the prerequisites for financial stability in Europe through banking union. It was supplied, however, by a political process that kept significant resources in resolution and deposit insurance largely in national hands. This paper examines the politics behind those decisions, and how the hybrid of European and national competences affects bank regulation and financial stability in the EU. It concludes that the tension between strong EU supervisory powers and weak capacity to deal with insolvent institutions will persist.

EU Financial Regulation and Markets: Beyond Fragmentation and Differentiation, 2021

The European Banking Union (EBU) has had a complex strategic, political, economic and legal formation, and throughout the current turmoil there has been a special emphasis on preserving its stability and further development. The EBU formally consists of three interconnected pillars applicable to the euro area: (1) the Single Supervisory Mechanism (SSM) that encompasses European Central Bank’s (ECB) direct and indirect prudential supervision; (2) the Single Resolution Mechanism (SRM) that provides for a harmonized resolution framework; and (3) an envisaged safety net in the form of the European Deposit Insurance Scheme (EDIS). Additionally, the EBU is based on the common EU-wide Single Rulebook. A strong incentive for the EBU’s creation originated both from the repercussions of the global financial crisis and the European sovereign debt crisis. The EBU has experienced constant challenges from its very beginning, including the opposition to any indication of a transfer union, and criticism related to its design. Although progress is recommended on all elements, the most compelling is timely completion of the EDIS. From its inception, the EBU’s main goal has been to break the “vicious circle” between sovereigns and their banks – and that is in the focus of this article. Furthermore, this article explores the structure, achievements and inadequacies of the EBU pillars, and analyses potential threats and opportunities related to this segment of European integration.