BUILDING A BANKING UNION IN THE EUROPEAN UNION – A SOLUTION TO THE FINANCIAL CRISIS?

• Main Author: Monica (ŞAGUNA) FIGHIROAE
• Format: Article
• Language: English
• Published: Nicolae Titulescu University Publishing House 2015-07-01
• Series: Challenges of the Knowledge Society
• Subjects: Banking Union; European Central Bank; financial crisis; euro area; integration.
• Online Access: http://cks.univnt.ro/uploads/cks_2015_articles/index.php?dir=03_public_law%2F&download=CKS+2015_public_law_art.060.pdf

The financial crisis of 2008 highlighted the need for a deeper integration of the banking system, as a warranty to support long-term financial stability. It was argued that the grounds of the crisis lie also in an uncoordinated national response to the failure of banks, in a fragmentation of the Single Market in lending and funding and, therefore, a better regulation and supervision of the financial sector can ensure financial stability and growth in the European Union. In order to restore the proper functioning of the internal market and to avoid future crisis, the European Commission launched a set of initiatives, in order to assure a safer and sounder financial sector for the single market; are included here: stronger prudential requirements for banks, improved depositor protection and rules for managing failing banks and a single rulebook for all the 28 Member States of the European Union. The single rule book is the step towards the Banking Union sits. The banking union consists of three pillars: a Single Supervisory Mechanism, a Single Resolution Mechanism and a joint deposit-insurance scheme. As on 4 November 2014 the European Central Bank assumed responsibility for euro area banking supervision, the Banking Union is still under construction. In this framework, the purpose of my paper is to analyse the process of building a Banking Union in Europe. Therefore, the objectives of my paper are to explore the steps to fulfilling a real integration of the European banking system, as a solution to the financial crisis.