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Eurozone Bank Crisis & Federalism

29 Pages Posted: 10 Nov 2012 Last revised: 15 Dec 2012

Nicholas L. Georgakopoulos

Indiana University - Robert H. McKinney School of Law

Date Written: November 9, 2012


The laggards of the Eurozone pose a novel economic and legal issue. Whereas the Eurozone sorely needs growth in the PIRGS, neither conventional Keynesian stimulus nor devaluations are likely to be productive. This essay proposes that growth be rekindled by forced over-recapitalization of the laggards’ private banks. This will generate local growth while circumventing inefficient national governments and without starting an inflation spiral or additional bureaucracy. The danger is that the proposal leaves open the possibility that member states can take advantage of their banks which implies the Eurozone needs to revisit its approach to federalism, to help which the paper juxtaposes the development of US bank federalism.

Keywords: Eurozone Crisis, Great Recession, PIRGS Economies, Economic Regulation, Bank Regulation, Bank Supervision, Regulatory Federalism

JEL Classification: E02, E58, Κ23

Suggested Citation

Georgakopoulos, Nicholas L., Eurozone Bank Crisis & Federalism (November 9, 2012). Indiana University Robert H. McKinney School of Law Research Paper No. 2012-29. Available at SSRN: or

Nicholas Georgakopoulos (Contact Author)

Indiana University - Robert H. McKinney School of Law ( email )

530 West New York Street
Indianapolis, IN 46202
United States
317-274-1825 (Phone)


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