Georg Ringe, Jeffrey N. Gordon, Wednesday, January 28, 2015 - 00:00
Stefano Micossi, Thursday, June 5, 2014 - 00:00
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.
Jeffrey N. Gordon, Georg Ringe, Wednesday, April 30, 2014 - 00:00
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.
Nicolas Véron, Wednesday, December 19, 2012 - 00:00
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.