The political economy of European banking union

Présentation de l'éditeur : "The establishment of Banking Union represents a major development in European economic governance and European integration history more generally. Banking Union is also significant because not all European Union (EU) member states have joined, which has increased the trend towards differentiated integration in the EU, posing a major challenge to the EU as a whole and to the opt-out countries. This book is informed by two main empirical questions. Why was Banking Union - presented by proponents as a crucial move to 'complete' Economic and Monetary Union (EMU) - proposed only in 2012, over twenty years after the adoption of the Maastricht Treaty? Why has a certain design for Banking Union been agreed and some elements of this design prioritized over others? A two-step explanation is articulated in this study. First, it explains why euro area member state governments moved to consider Banking Union by building on the concept of the 'financial trilemma', and examining the implications of the single currency for euro area member state banking systems. Second, it explains the design of Banking Union by examining the preferences of member state governments on the core components of Banking Union and developing a comparative political economy analysis focused on the configuration of national banking systems and varying national concern for the moral hazard facing banks and sovereigns created by euro level support mechanisms." Cover 1 The Political Economy of European Banking Union 4 Copyright 5 Preface 6 Contents 10 List of Figures 12 List of Tables 14 List of Acronyms 16 1: Introduction 20 The Argument 21 The Structure 24 2: Understanding Economic and Monetary Union to Understand Banking Union 27 Lessons from the Literature on Economic and Monetary Union 27 Lessons from the Emerging Literature on the Establishment and Design of Banking Union 34 The Analytical Framework of the Book 37 Conclusion 42 3: The Financial Trilemma and the Vicious Circle of Banking and Sovereign Debt Crises 44 The Pre-crisis Framework for Financial Stability in the European Union 45 The Causes of the International Financial Crisis and its Effects in the European Union 48 The Post-crisis Reform of the European Union Framework for Financial Stability 52 The Unfolding of the Sovereign Debt Crisis in the Euro Area Periphery 55 The Economic Causes of the Sovereign Debt Crisis in the Euro Area Periphery 59 The Institutional and Political Causes of the Sovereign Debt Crisis in the Euro Area 63 Conclusion 67 4: European Banking Systems in Times of Crisis 69 Introduction 69 Measuring Banking System Internationalization 71 Additional Banking System Features of Potential Significance 82 Measuring the Health of the Banking System 84 Six National Banking Systems 92 Germany: Defending the `Local Champions ́ 92 France: Defending the `National Champions ́ 96 The Netherlands: A Surprisingly Parochial System 97 The Italian Banking System and its `Half-Hearted ́ Consolidation 99 The Spanish Banking System: Destabilized by a Traditional Crisis 101 The International Champions of the British Banking System 104 Conclusion 104 5: Supervision 108 Introduction 108 Challenging Supervisory Forbearance: Concerns with Moral Hazard and Divergent Supervisory Practice 109 The Intergovernmental Negotiations on the Single Supervisory Mechanism 110 The European Central Bank ́s Positioning on the Single Supervisory Mechanism 113 National Banking Systems and Preferences on Direct European Central Bank Supervision 114 Germany 117 France 119 The Netherlands 120 Italy 121 Spain 122 Euro Outsiders and the Single Supervisory Mechanism 124 National Banking Systems and Non-Euro Area Country Preference on Single Supervisory Mechanism Participation 125 The Comprehensive Assessment 2014 129 Conclusion 131 6: Resolution 134 Introduction 134 The Negotiation of the Bank Recovery and Resolution Directive 136 The Negotiations on the Single Resolution Mechanism 141 Explaining National Preferences on the Single Resolution Mechanism 148 Germany 149 France 150 The Netherlands 151 Italy 153 Spain 154 Conclusion 154 7: Deposit Guarantee 157 The Main Functions and Features of Deposit Guarantee Schemes 159 The Negotiations on the Revision of the Existing Deposit Guarantee Scheme Directive 160 Negotiating the Common Deposit Guarantee Scheme 165 National Preferences and Divergent Deposit Guarantee Schemes across the European Union 168 Germany 168 France 169 The Netherlands 170 Italy 171 Spain 172 The UK 173 Conclusion 174 8: Lender of Last Resort and the `Fiscal Backstop ́ in Banking Union 175 Lender of Last Resort: Definitions and Functions 176 The Measures Taken by the European Central Bank During the Crises 177 Temporary Financial Support to Ailing Countries: The European Financial Stability Facility 184 Establishing the European Stability Mechanism 187 The Reform of Fiscal Policy Coordination and of the Stability and Growth Pact 193 Conclusion 196 9: Banking Regulation and theSingle Rulebook 199 The International Basel III Accord 201 The Capital Requirements Directive IV `Package ́ 205 Explaining National Preferences on Capital and Liquidity Rules in the EU 209 Diverging Capital Positions 210 Leverage Ratio of National Banks in the European Union 212 The Liquidity Position of National Banks Across the European Union 213 The European Union ́s Regulation on Structural Measures Improving the Resilience of Credit Institutions 215 National Preferences on Bank Structural Reform 218 Conclusion 222 10: Conclusion 225 Contributions to the Literature and Proposals forFurther Research 228 The Never-Ending `Completion ́ of Economic and Monetary Union 230 Conclusion 233 References 236 Index 266 Présentation de l'éditeur : "The establishment of Banking Union represents a major development in European economic governance and European integration history more generally. Banking Union is also significant because not all European Union (EU) member states have joined, which has increased the trend towards differentiated integration in the EU, posing a major challenge to the EU as a whole and to the opt-out countries. This book is informed by two main empirical questions. Why was Banking Union - presented by proponents as a crucial move to 'complete' Economic and Monetary Union (EMU) - proposed only in 2012, over twenty years after the adoption of the Maastricht Treaty? Why has a certain design for Banking Union been agreed and some elements of this design prioritized over others? A two-step explanation is articulated in this study. First, it explains why euro area member state governments moved to consider Banking Union by building on the concept of the 'financial trilemma', and examining the implications of the single currency for euro area member state banking systems. Second, it explains the design of Banking Union by examining the preferences of member state governments on the core components of Banking Union and developing a comparative political economy analysis focused on the configuration of national banking systems and varying national concern for the moral hazard facing banks and sovereigns created by euro level support mechanisms."