2015年-CEPS欧洲政策研究中心_Banking_Union_in_the_Eurozone_and_the_European_Union_4页_301kb

Banking Union in the Eurozone and the European Union Summary

Core Content

The document discusses the establishment of a banking union within the European Union (EU) and the eurozone, focusing on the challenges and opportunities arising from the eurozone crisis. It highlights the need for institutional reforms to address financial stability, prevent contagion, and reduce the burden on taxpayers.

Main Views

• Systemic vs. Fair Weather Arrangements: The authors distinguish between addressing a systemic confidence crisis and implementing "fair weather" arrangements for individual bank stability. The former is primarily a eurozone issue, while the latter concerns the entire EU.

• Deposit Insurance: The current EU-wide deposit insurance level is harmonized at €100,000, and the European Commission has proposed a target funding level of 1.5% of total insured deposits over 10 years (extended to 15 by the European Parliament). However, member states in the Council want to reduce this target to 0.5%. The existing national schemes are mostly compliant with the principles, but the funding levels are still insufficient.

• Resolution Funds: The Commission proposal requires each member state to establish a national resolution fund, funded ex-ante with risk-based fees. These funds are intended to support restructuring and recapitalization, not to cover losses. However, they lack the capacity to handle large cross-border bank failures.

• Supranational Solidarity: A key element is the mutualization of risks, where national resolution funds may lend up to 50% of their resources to other member states. This has faced strong opposition due to concerns about risk-sharing without centralized supervision.

• Supervision and Regulation: The proposals currently lack centralized supervision and mandated corrective actions. The authors argue that centralization of supervisory powers is necessary, and this can be achieved either through the European Central Bank (ECB) or the European Banking Authority (EBA), depending on the chosen route.

• Crisis Management in the Eurozone: The eurozone faces a unique challenge due to the intertwined sovereign and banking crises. The ECB can provide unlimited liquidity, but it lacks the fiscal backing to support such interventions. The European Stability Mechanism (ESM) is seen as the appropriate tool to provide this fiscal support, but current arrangements are inadequate.

Key Information

• Deposit Insurance: Directive 94/19/EC and 2009/14/EC have harmonized deposit protection. A new directive is under consideration.
• Funding Levels: The Commission aims for 1.5% of total insured deposits over 10 years, but Council members want to reduce it to 0.5%.
• National Resolution Funds: These are required to be funded ex-ante with risk-based fees and must reach at least 1% of deposits within 10 years.
• Supervision: There is a need for centralized supervision and mandated corrective actions to prevent excessive risk-taking and ensure financial stability.
• Supervisory Authority: The ECB or EBA could be the central authority, with the ECB having the legal power to implement centralization under Treaty Article 127.6.
• Crisis Management: The ECB's role in providing liquidity is crucial, but it needs fiscal backing from the EU. The ESM is the recommended mechanism, though it has not yet provided lasting solutions.
• Contagion Risk: The lack of robust mechanisms to address cross-border bank failures and the absence of a unified resolution framework increase the risk of contagion.

Conclusion

The authors argue that while the foundations of a banking union are already in place, the full realization of a unified system requires stronger institutional, political, and fiscal frameworks. They emphasize the importance of deposit insurance, resolution funds, and centralized supervision in ensuring financial stability and reducing moral hazard. The establishment of a banking union is seen as a necessary step to restore confidence and prevent further crises, but it must be approached with careful consideration of the risks and the need for supranational cooperation.