The Single Resolution Mechanism of the European Banking Union: its structure and functioning
The recent financial crisis showed that the institutions of the European Union (EU) and its member states are poorly prepared for solving current problems of banks, which are experiencing financial difficulties in European markets. In order to be able to further provide services for citizens and companies, member states’ governments had to support banks with public finances and provide guarantees on an unprecedented scale. It did help to avoid a collapse of banks and a disturbance of the economy, but only by putting the burden on taxpayers and thereby causing deterioration in public finances. An agreement about the right course of action in the face of these difficulties experienced by cross-national banks has not been reached either. The major situation changer should be the European Banking Union (EBU), also called the Integrated Financial System, which is in the process of being created. The foundations for it have been laid during Lithuanian presidency of the Council of the EU in the second half of 2013. For Lithuania and all other EU member states, joining the banking union will mean handing over important national state powers to the European Union institutions.
UNIA BANKOWA I UNIA RYNKÓW KAPITAŁOWYCH - ANALIZA PORÓWNAWCZA EUROPEJSKICH PROJEKTÓW INTEGRACYJNYCH W OBSZARZE FINANSOWYM BANKING UNION AND CAPITAL MARKETS UNION - COMPARATIVE ANALYSIS OF THE EUROPEAN INTEGRATION PROJECTS IN FINANCIAL AREA
Summary: The global financial crisis (2007-2008) has exposed weaknesses in the supervision of the banking system and the leveling is the main objective of the European Banking Union. In turn, the lack of sufficient effectiveness of the EU authorities in stimulating economic growth lay at the basis of European Capital Markets Union assuming stimulating investment through the capital market. Both projects concern the financial area, but the first one is dedicated only to the euro area with the option of the accession of other countries, and the second to all EU-28. A special role in this project will be served by the United Kingdom because of the most developed and largest equity market among all EU countries. Moreover the supporters of Capital Markets Union in the UK suggest even big benefits of this project, which is to be a counterweight to the views of the country’s leaving the EU. The timetable for their full implementation is quite remote, and the banking union in the range of two pillars is already being implemented, and the Capital Markets Union is at the end of the first half of 2015 at the development stage of the Action Plan setting out the detailed schedule of activities for the implementation of this project. The issue of the article is very important and timely, while pointing to the need for further research on banking union and Capital Markets Union.
The Role of the Safety Net in Resolving Large Financial Institutions
AbstractThe following sections are included:The Wider Context of Resolving Large Bank InsolvenciesThe International DimensionToo-Big-to-Save?Other Factors Affecting the Choice of Structure and Regulatory LocationThe Design of the Safety NetThe Need for Action over Systemically Important BanksTrying to Minimize the CostJudging When to Intervene and Assessing the LossEqual Treatment and the Need for a Common Pool ApproachThe Need for a Resolution AgencyAppendix: The Example of NordeaReferences