Beyond the Pandemic: Reviving Europe's Banking Union

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You are invited to a CEPR / SAFE European Policy webinar on:
  
Beyond the Pandemic: Reviving the European Banking Union
 
Join us on Wednesday 10 June 2020
11:00-12:00 (BST, London), 12:00 - 13:00 (CST)

Panellists:
Ignazio Angeloni, Harvard Kennedy School and former Member of the ECB Supervisory Board
Elga Bartsch, Blackrock
Mathias Dewatripont, ECARES, Université Libre de Bruxelles and CEPR
Jan-Pieter Krahnen, SAFE, Goethe University and CEPR

Moderator:
Tim Phillips, CEPR 
 

This webinar discusses a new book written by Ignazio Angeloni, which reviews how the banking union has functioned since its creation in 2014 and discusses changes which may help improve its performance. The current health crisis and the ensuing global recession are producing unprecedented (in peacetime at least) policy responses in all fields, including banking regulation and supervision. While this will greatly affect the European banking industry and its regulatory environment, the reasons why the banking union needs reform may not be fundamentally altered by the current predicament.

Most agree that the banking union today is ‘incomplete’, but opinions differ on the specifics. As the emergency subsides, the need to complete the banking union and improve its functioning will not go away, and may turn out to be more urgent.

Join this webinar, moderated by Tim Phillips, with Ignazio Angeloni, Elga Bartsch, Mathias Dewatripont, and Jan-Pieter Krahnen who will discuss improvements to the Banking Union, and how the euro area banking sector may be affected by the pandemic and what the policy responses to it may be.

Register online: https://us02web.zoom.us/webinar/register/3115910171498/WN_LvCjMzRjTmOWtiCAa0wmGw

The transition to a banking union for the EMU

Bert Smid, Beau Soederhuizen, Rutger Teulings, 10 September 2018

The transition to a European banking union is not straightforward. A key issue is how to prioritise risk sharing and risk reduction. This column examines three possible approaches, describing the respective transition scenarios and analysing the consequences for banks during the transition phase. None of the scenarios is optimal for all countries, but waiting too long may lead to solutions needing to be found under the pressure of a new crisis.

Restructure EU banks to facilitate resolution

Georg Ringe, Jeffrey Gordon, 28 January 2015

Bank resolution is a key pillar of the European Banking Union. This column argues that the current structure of large EU banks is not conducive to an effective and unbiased resolution procedure. The authors would require systemically important banks to reorganise into a ‘holding company’ structure, where the parent company holds unsecured term debt sufficient to cover losses at its operating financial subsidiaries. This would facilitate a ‘single point of entry’ resolution procedure, minimising the risk of creditor runs and destructive ring-fencing by national regulators.

Bail-in rules in EU banking union and financial stability

Stefano Micossi, 05 June 2014

The European banking union is in pressing need of a unified banking resolution mechanism, but public bail-in has become increasingly unpopular. This column details new legislation towards a single resolution mechanism in the EU that minimises public exposure. The shareholders of an insolvent bank will be the first to take the hit, followed by creditors, before the public. This has the advantage also of mitigating moral hazard.

Saving bank resolution in the Eurozone

Jeffrey Gordon, Georg Ringe, 30 April 2014

The European Parliament recently adopted the Single Resolution Mechanism. Though supposed to be a pillar of the European banking union, it is fraught with difficulties. This column makes a proposal for a new organisational structure that can deal with bank failure more effectively. European banks should be required to self-insure against failure. Further, the ECB should be the only financially credible player to provide liquidity for the resolution procedure. These proposals would strengthen the current banking union project, and can overcome certain political difficulties.

Europe takes an important step towards a European banking union

Nicolas Véron, 19 December 2012

European leaders pieced together an historic compromise last week on a European banking union. This column argues that the agreement, which centred on banking supervision, is only the first step on the long and winding road towards a banking union. But the fact that this step is now essentially confirmed is almost unqualified good news.

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