Peterson Institute publications
The Peterson Institute for International Economics is a private, nonprofit, nonpartisan
research institution devoted to the study of international economic policy. More › ›
RSS News Feed Search

Policy Brief 13-23

How to Form a More Perfect European Banking Union

by Angel Ubide, Peterson Institute for International Economics

October 2013

View full document [pdf]


The evolving plan for a European banking union falls short of the ideal of an "ever closer union." In fact, the plan's focus on national resolution authorities and funds for insolvent financial institutions, a minimal euro area financing backstop, and costs imposed on creditors of failed banks, could lead to a looser, weaker, and more fragmented banking system. Some aspects of the plan of European leaders will improve the system's soundness, but other aspects could dampen lending in the near term and reduce economic growth. Ubide urges policymakers to focus on making the banking union stronger and more coherent. Troubled banks supervised by the European Central Bank should be covered by a European resolution authority and a European resolution fund to oversee bankruptcy, restructuring, and other reforms. To produce a more united, solid, and stable euro area, the European plan has to lower national barriers to banking, not raise them.


RELATED LINKS

Policy Brief 14-5: Is the European Central Bank Failing Its Price Stability Mandate? February 2014

Policy Brief 13-4: Reengineering EMU for an Uncertain World February 2013

Policy Brief 15-23: Toward a European Migration and Mobility Union December 2015

Policy Brief 15-11: Hungary under Orbán: Can Central Planning Revive Its Economy? July 2015

Paper: Capital Markets Union: A Long-Term Vision April 25, 2015

PIIE Briefing 14-5: Rebuilding Europe's Common Future: Combining Growth and Reform in the Euro Area December 2014

Testimony: Economic Crisis: The Global Impact of a Greek Default June 25, 2015

Testimony: Banking Union in Nine Questions September 30, 2014

Book: Managing the Euro Area Debt Crisis June 2014

Book: Inside the Euro Crisis: An Eyewitness Account June 2014

Book: Responding to Financial Crisis: Lessons from Asia Then, the United States and Europe Now October 2013

Policy Brief 13-17: A Realistic Bridge Towards European Banking Union June 2013

Op-ed: Five Myths about the Euro Crisis September 7, 2012

Testimony: Challenges of Europe's Fourfold Union August 1, 2012

Policy Brief 12-18: The Coming Resolution of the European Crisis: An Update June 2012

Book: Transatlantic Economic Challenges in an Era of Growing Multipolarity July 2012

Book: Resolving the European Debt Crisis March 2012

Policy Brief 12-4: The European Crisis Deepens January 2012