The European Banking Union: will it be sufficient to avert another debt crisis in Europe?

Ross Alexander Spence

Abstract


The rationales for the creation of the European Banking Union (“EBU”), what its objectives are and the main pillars of support for such a scheme, are worthy of investigation.  This article means to critically discuss the various elements of the EBU and determine whether the Single Supervisory Mechanism and the Single Resolution Mechanism, the main pillars underpinning the structure, are robust enough to avert another debt crisis in Europe. At the EBU’s heart lies the Single Rulebook (“SR”), which aims to counter the risk of fragmentation and nationalist tendencies. This inward looking trend became apparent in the recent financial crises, and contributed greatly to them. In an effort to avoid repeating the divisive and disjointed mistakes of the past, the SR is instead looking to provide unity and harmonisation across all participating member states. 


Keywords


European Banking Union; sovereign debt crisis; regulation of international finance

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