The Political Economy of European Banking Union

ISBN : 9780198727927

David Howarth; Lucia Quaglia
288 Pages
156 x 234 mm
Pub date
Sep 2016
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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.


1 Introduction
2 Understanding EMU to understand Banking Union
3 The financial trilemma and the vicious circle of banking and sovereign debt crises
4 European banking systems in times of crises
5 Supervision
6 Resolution
7 Deposit guarantee
8 Lender of Last Resort and the 'Fiscal Backstop'
9 Banking regulation and the single rule book
10 Conclusion

About the author: 

David Howarth is Professor of European political economy at the University of Luxembourg and a former Jean Monnet Chair at the University of Edinburgh. He is the author or co-author of three monographs, a textbook, and over seventy journal articles and book chapters on European political economy topics and specifically financial regulation and Economic and Monetary Union. He has also edited or co-edited seven journal special editions and two books on these topics including, most recently (with Huw Macartney), Banking Regulation and Supervision and the Great Leap Forward in European Integration, with the journal West European Politics.; Lucia Quaglia is Professor of Political Science at the University of York. Her most recent research monograph is The European Union and Global Financial Regulation (Oxford University Press, 2014). Her previous monographs Governing Financial Services in the European Union (2010) and Central Banking Governance in the EU: A Comparative Analysis (2008) were both published by Routledge. Together with Kenneth Dyson she published two volumes: European Economic Governance and Policies (Oxford University Press, 2010). Together David Howarth she is the guest co-editor of the special issue of the Review of International Political Economy on 'The Political Economy of the Sovereign Debt Crisis in the Euro area' (2015). Together with Dermot Hodson, she was the guest co-editor of the special issue of the Journal of Common Market Studies on 'The Global Financial Turmoil: European Perspectives and Lessons' (2009).

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