European Banking Union: A Challenge for a More United Europe

75 Pages Posted: 3 Sep 2013

See all articles by Francesco Capriglione

Francesco Capriglione

Università degli Studi Guglielmo Marconi

Date Written: September 2, 2013

Abstract

The single supervision mechanism, enacted by European Council at the end of 2012, marks a significant “turning point” on the European integration process, by opposing the uncertainties and doubts Euro sceptics, determined by the recent financial crisis, a technical project that intends to strengthen the construction of the Union. This mechanism aims to realize a banking supervision geared to the homogenization of operational forms and, therefore, proper to enhance strong forms of coordination and cooperation between Member States. On the basis of this program, we can believe that only by passing 28 different banking regulatory systems will become possible to overcome the problems and conflicts which continue to be experienced in the Union, by introducing corrective changes to the current recessionary situation.

This has led to the creation of a European Banking Union and the assignment to the ECB of supervisory powers over those banks, whose operational size is able to affect the stability of the financial system. This assignment is coherent with the unitary character of the “money‐credit” phenomenon and, therefore, into account of the link between the governance of credit and monetary; it also recognizes the role of the ECB in recent years through the so‐called unconventional operations (from the “Security Market Programme” plan to the “Long Term Refinancing Operations” and, subsequently, to the Medium‐Term Objective) to cope with the exceptional events that arose in the financial markets. Then we have to believe that it is undoubtedly legitimate for the institution in question to take on its new role, on additional considerations relating to the possibility provided for in paragraph 6 of Article 127 of the FEU Treaty to confer upon the ECB “specific tasks” in the prudential supervision of credit institutions.

Various substantial obstacles, such as wide cultural diversity and also conflicting interests between the different EU countries, may hinder the achievement of the objectives indicated above. In this context, a particular role is played by the United Kingdom, which was not so keen to join the Euro zone and which recently decided to renegotiate its participation in the Union. Therefore, it is difficult to say what will be the results of such an innovative construction, and what are the chances of a positive outcome to an intervention which is heavily engaging European institutions. It seems that such a goal will only be achievable when each Member State accepts diversity with a sharing spirit, when solidarity becomes a citizen in Europe, making concrete a far‐off vision for a common life.

Suggested Citation

Capriglione, Francesco, European Banking Union: A Challenge for a More United Europe (September 2, 2013). Available at SSRN: https://ssrn.com/abstract=2319297 or http://dx.doi.org/10.2139/ssrn.2319297

Francesco Capriglione (Contact Author)

Università degli Studi Guglielmo Marconi ( email )

Via Plinio 44
Rome, RM 00100
Italy

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