Europe's Banking Union

Véron, Nicolas

doi:10.1142/9789814678339_0006

Cited by 21 publications

(23 citation statements)

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“…National authorities enjoyed much autonomy in carrying out their tasks and could follow their own 'philosophy' of supervision, creating considerable room for regulatory arbitrage by credit institutions. At the same time, a vigorous banking sector encouraged national authorities to be lenient towards their own banks, so as not to penalize their local 'champions' (Véron 2015). Together, national discretion and 'banking nationalism' created the incentive for excessive risk-taking by banks.…”

Section: Banking Union: Ssm and Srmmentioning

confidence: 99%

“…The negative feedback loop between banks and sovereigns quickly took the centre stage in the euro area and paved the way for initiatives to establish a Banking Union (Véron 2015;Quaglia 2016, 2020). On the one hand, the problem of crossjurisdiction externalities was solved by giving the ECB the task of supervising all major credit institutions using Article 127(6) of the TFEU as legal basis.…”

Section: Banking Union: Ssm and Srmmentioning

confidence: 99%

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Democratic legitimacy in the post-crisis EMU

Crum

Merlo

2020

Journal of European Integration

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This paper examines the democratic legitimacy of Economic and Monetary Union (EMU) since the international financial crisis hit the euro area. From its inception, EMU has been marked by an asymmetry as its monetary pillar relied on output legitimacy while its economic pillar relied essentially on input legitimacy at the national level. The crisis severely challenged EMU's output legitimacy, which led to the establishment of new European-level institutions. We analyse the European Stability Mechanism, the European Semester, and Banking Union to take stock of their powers and the ways that these are balanced by mechanisms of legitimacy. Our main finding is that the intergovernmental and output-oriented approach that originally informed the legitimacy of EMU has remained prevalent after the crisis. However, as the three domainsin varying degreesaddress questions that are essentially political, we argue that the channels for input legitimacy at the European level remain deficient.

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Section: Banking Union: Ssm and Srmmentioning

confidence: 99%

Section: Banking Union: Ssm and Srmmentioning

confidence: 99%

Democratic legitimacy in the post-crisis EMU

Crum

Merlo

2020

Journal of European Integration

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“…In mid-2012, the ECB finally got agreement on the creation of a banking union. In return, the ECB announced an openended bond-buying program called Outright Monetary Transactions (OMT) (Véron 2015).…”

Section: The European Central Bankmentioning

confidence: 99%

Independent or lonely? Central banking in crisis

Mabbett

Schelkle

2019

Review of International Political Economy

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The financial crisis has called our understanding of central bank independence (CBI) into question. Central banks were praised for bold interventions but simultaneously criticized for overreaching their mandates. Central bankers themselves have complained that they are 'the only game in town'. We develop the second generation theory of CBI to understand how independence can turn into loneliness when a financial crisis calls for cooperation between fiscal authorities and the central bank. Central banks are protected from interference when there are multiple political veto-players, but the latter can also block cooperation. Furthermore, central banks in multi-veto-player systems operate under legal constraints on their financial stabilization actions. They can circumvent these constraints, but this invites criticism and retribution. More surprisingly, central banks have strategically invoked their constraints in order to gain cooperation from political authorities.

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“…In general, any losses arising from bank failures will still end up hitting national budgets, except for special circumstances under which the European Stability Mechanism (ESM) might directly inject equity into banks (the amount being capped at €60 billion). If banking union is a required complement to monetary union, so is fiscal union, featuring a sufficiently strong common fiscal backstop at the center (Pisani-Ferry and Wolff 2012;IMF 2013;Hellwig 2014;Veron 2015). The Euro Treasury is far more suitable than the ESM to play this role, as the Euro Treasury rests on a sounder funding basis.…”

Section: Making the Euro Viable: The Ecb Needs A Euro Treasury Partnermentioning

confidence: 99%

From Anti-Growth Bias to Quantitative Easing: The ECB’s Belated Conversion?

Bibow

2017

Economic Imbalances and Institutional Changes to the Euro and the European Union

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in June 2016The Levy Economics Institute Working Paper Collection presents research in progress by Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals.Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic research it generates viable, effective public policy responses to important economic problems that profoundly affect the quality of life in the United States and abroad.

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Europe's Banking Union

Cited by 21 publications

References 0 publications

Democratic legitimacy in the post-crisis EMU

Democratic legitimacy in the post-crisis EMU

Independent or lonely? Central banking in crisis

From Anti-Growth Bias to Quantitative Easing: The ECB’s Belated Conversion?

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