Banking Union: Implementation and Challenges

Basic principles of the European banking union were officially announced in summer 2012 as a response to the financial crisis that had hit the European banking market unprepared. The banking union aims to provide financial stability within the euro area by transferring national responsibilities to the European level. Major building blocks of the banking union are a Single Supervisory Mechanism (SSM) and a Single Resolution Mechanism (SRM) that shall ensure common European standards for the supervision, resolution and restructuring of European banks. The implementation of the new mechanisms as well as the harmonization of national deposit insurance systems are still major challenges.

Keywords: bail in, banking supervision, banking resolution, Basel III, capital regulation, deposit insurance, EBA, SSM, too big to fail


Research Papers on the Banking Union

Title Author/s Research Area Source Published Keywords

Bank Response To Higher Capital Requirements: Evidence From A Quasi-Natural Experiment

Reint Gropp, Thomas Mosk, Steven Ongena, Carlo Wix Financial Institutions SAFE Working Paper No. 156 2016 Bank capital ratios, Bank regulation, Credit supply

Bank Rescues and Bailout Expectations: The Erosion of Market Discipline During the Financial Crisis

Florian Hett, Alexander Schmidt Financial Institutions, Transparency Lab accepted for publication in the Journal of Financial Economics, 2016 2016 Bailout, Implicit Guarantees, Too-Big-To-Fail, Market Discipline

Freedom of Contract and Financial Stability through the lens of the Legal Theory of Finance

Brigitte Haar Corporate Finance SAFE Working Paper No. 141 2016 law and finance, financial stability, financial contracts, structured finance, asset-backed securities, pari passu clauses, collective action clauses, otc derivatives markets, central counter parties, Basel III, Coco bonds, trust law, China

Von mikro- zu makroprudenzieller Regulierung

Mohamed Aldegwy, Matthias Thiemann Macro Finance Springer, 2016 2016 Banking Regulation, Systemic Risk, Formalism, Equilibrium Thinking, Discourse, Citation Network Analysis

The Intended and Unintended Consequences of Financial-Market Regulations: A General Equilibrium Analysis

Adrian Buss, Bernard Dumas, Raman Uppal, Grigory Vilkov Financial Markets Journal of Monetary Economics, 2016 2016 Tobin tax, borrowing constraints, short-sale constraints, stock market volatility, incomplete markets, differences of opinion

Bail-In Clauses

Jan Pieter Krahnen, Laura Moretti Financial Institutions Cambridge University Press, 2015 2015

The road from micro-prudential to macro-prudential regulation

Ester Faia, Isabel Schnabel Macro Finance Cambridge University Press, 2015 2015

How Special Are They? Targeting Systemic Risk by Regulating Shadow Banks

Tobias Tröger Financial Institutions Cambridge University Press, 2016 2016 shadow banking, regulatory arbitrage, prudential supervision

Pro-Cyclical Capital Regulation and Lending

Markus Behn, Rainer Haselmann, Paul Wachtel Financial Institutions The Journal of Finance, 2016 2016 capital regulation, credit crunch, financial crisis, pro-cyclicality

How Do Banks React to Catastrophic Events? Evidence from Hurricane Katrina

Claudia Lambert, Felix Noth, Ulrich Schüwer Financial Institutions SAFE Working Paper No. 94 2015 catastrophic events, bank regulation, capital ratios, natural experiment

Banking Union and the Governance of Credit Institutions - A Legal Perspective

Jens-Hinrich Binder Financial Institutions SAFE Working Paper No. 96 2015 Banking Union, Single Supervisory Mechanism, Single Resolution Mechanism, Banking Regulation, Bank Corporate Governance

The Limits of Model-Based Regulation

Markus Behn, Rainer Haselmann, Vikrant Vig Financial Institutions SAFE Working Paper No. 75 2014 capital regulation, internal ratings, Basel regulation

Resolution Planning and Structural Bank Reform within the Banking Union

Jens-Hinrich Binder Financial Institutions SAFE Working Paper No. 81 2015 Bank Resolution, Resolution Planning, Living Wills, Structural Bank Reform, Banking Union

Incentive-Based Capital Requirements

Christian Eufinger, Andrej Gill Transparency Lab, Corporate Finance SAFE Working Paper No. 9 2013 Basel III, capital regulation, compensation, leverage, risk

How do insured deposits affect bank risk? Evidence from the 2008 Emergency Economic Stabilization Act

Claudia Lambert, Felix Noth, Ulrich Schüwer Financial Institutions SAFE Working Paper No. 38 2013 financial crisis, deposit insurance, bank regulation

Systemic Risk in an Interconnected Banking System with Endogenous Asset Markets

Marcel Bluhm, Jan Pieter Krahnen Systemic Risk Lab, Macro Finance Journal of Financial Stability, 2014 2014 systemic risk, systemic risk charge, macroprudential supervision, Shapley value, financial network

The Single Supervisory Mechanism – Panacea or Quack Banking Regulation?

Tobias Tröger Financial Institutions European Business Organization Law Review, 2014 2014 prudential supervision, banking union, regulatory capture, political economy of bureaucracy, Single Supervisory Mechanism (SSM), European Central Bank (ECB), European Banking Authority (EBA)

The Effects of Contingent Convertible (CoCo) Bonds on Insurers’ Capital Requirements under Solvency II

Helmut Gründl, Tobias Niedrig Financial Institutions The Geneva Papers on Risk and Insurance: Issues and Practice, 2015 2015 Contingent Convertible Capital, CoCo Bond, Basel III, Solvency II, Life Insurance, Interconnectedness

Optimal Asset Allocation for Interconnected Life Insurers in the Low Interest Rate Environment Under Solvency Regulation

Tobias Niedrig Financial Institutions Journal of Insurance Issues, 2015 2015 Basel III, Solvency II, Life Insurance, Interest Rate Guarantees, Asset Allocation, Contagion, Interconnectedness

Regulatory Influence on Market Conditions in the Banking Union

Tobias Tröger Financial Institutions European Business Organization Law Review, 2015 2015 banking union, macro-prudential supervision, real estate lending, bail-in, market discipline

Policy Papers on the Banking Union

Year Title Author/s Research Area Keywords Year
February 2017

Taking Bail-in Seriously - The Looming Risks for Banking Policy in the Rescue of Monte Paschi di Siena

Martin Götz, Jan Pieter Krahnen, Tobias Tröger Financial Institutions BRRD, banking resolution, banking supervision, SRM, financial stability, systemic risk 2017-02
September 2016

“Predatory” Margins and the Regulation and Supervision of Central Counterparty Clearing Houses (CCPs)

Jan Pieter Krahnen, Loriana Pelizzon Financial Markets central counterparties, CCP, derivatives, financial market regulation, financial market supervision 2016-09
July 2016

Fair Retail Banking: How to Prevent Mis-selling by Banks

Günter Franke, Thomas Mosk, Eberhard Schnebel Policy Center Retail Banking, Mis-selling, MiFID II 2016-07
March 2016

Should the marketing of subordinated debt be restricted/different in one way or the other? What to do in the case of mis-selling?

Martin Götz, Tobias Tröger Financial Institutions Bail-in, BRRD, subordinated debt, EU market regulation 2016-03
November 2016

Structural Reforms in Banking: The Role of Trading

Jan Pieter Krahnen, Felix Noth, Ulrich Schüwer Financial Institutions, Financial Markets proprietary trading, banking separation proposals, bank risk 2016-11
December 2015

The German Banking System: Characteristics and Challenges

Patrick Behr, Reinhard H. Schmidt Financial Institutions banks, government, regulation 2015-12
November 2015

Fragmentation in the European Retail Deposit Market and Implications for Loan Availability in European Member States

Bijan Kaffenberger, Mark Wahrenburg Household Finance household finance, deposits, European market fragmentation 2015-11
August 2015

The Effects of Contingent Convertible (CoCo) Bonds on Insurers' Capital Requirements under Solvency II

Helmut Gründl, Tobias Niedrig Financial Institutions Life insurance companies, Coco bonds, Solvency II 2015-08
September 2015

Euro Area Macro-Financial Stability: A Flow-of-Funds Perspective

Günter Beck, Hans-Helmut Kotz, Natalia Zabelina Financial Institutions, Macro Finance Bank and non-bank financial intermediation, shadow banking, financial stability, systemic risk, financial regulation 2015-09
September 2015

Did emergency liquidity assistance (ELA) of the ECB delay the bankruptcy of Greek banks?

Martin Götz, Rainer Haselmann, Jan Pieter Krahnen, Sascha Steffen Financial Institutions, Macro Finance emergency liquidity assistance (ELA), economic and monetary union, banking supervision, Greece 2015-09
September 2015

Waren die ELA-Notkredite der EZB für griechische Banken eine Konkursverschleppung?

Martin Götz, Rainer Haselmann, Jan Pieter Krahnen, Sascha Steffen Financial Institutions, Macro Finance emergency liquidity assistance (ELA), Währungsunion, Bankenaufsicht, Griechenland 2015-09
April 2014

Lessons from the Implementation of the Volcker Rule for Banking Structural Reform in the European Union

Douglas J. Elliott, Christian Rauch Financial Institutions banking separation proposals, proprietary trading ban, Dodd-Frank Act 2014-04
June 2014

Curtailing capture through the European banking union: a note of caution

Cornelia Woll Financial Institutions public-private relations, capture, collective action, social relations 2014-06
October 2014

Making Sense of the Comprehensive Assessment

Viral Acharya, Sascha Steffen Financial Institutions Asset Quality Review, Single Supervisy Mechanism, European Central Bankor 2014-10
November 2014

Robustness, Validity, and Significance of the ECB’s Asset Quality Review and Stress Test Exercise

Sascha Steffen Financial Institutions Stress Test, Comprehensive Assessment, Asset Quality Review, European Central Bank, European Banking Authority, Single Supervisory Mechanism 2014-11
November 2014

Bail-In jetzt richtig umsetzen

Jan Pieter Krahnen Financial Institutions total loss absorbing capacity (TLAC), nachrangiges Fremdkapital, too big to fail, bail-in 2014-11
November 2014

Implementing bail-in properly

Jan Pieter Krahnen Financial Institutions total loss absorbing capacity (TLAC), too big to fail, bail-in 2014-11
October 2013

Commentary on ESMA Guidelines on enforcement of financial information

Hans-Joachim Böcking, Marius Gros, Daniel Worret Corporate Finance Enforcement, ESMA, financial reporting quality, restatements 2013-10
October 2013

Rescue by Regulation? Key Points of the Liikanen Report

Jan Pieter Krahnen Financial Institutions Liikanen Commission, Bail-in, Banking Separation, Banking Union 2013-10
December 2013

Designing the funding side of the Single Resolution Mechanism (SRM): A proposal for a layered scheme with limited joint liability

Jan Pieter Krahnen, Jörg Rocholl Financial Institutions Banking Union, Single Resolution Mechanism 2013-12
September 2015

Financial Regulation: A Transatlantic Perspective

Ester Faia, Andreas Hackethal, Michael Haliassos, Katja Langenbucher Financial Institutions, Household Finance, Macro Finance banking union, microprudential regulation, macroprudential regulation, investor protection, borrower protection 2015-09
December 2013

A Big Bang for Banking in Europe

Jan Pieter Krahnen Financial Institutions comprehensive assessment, banking supervision, euro area 2013-12
April 2013

Deposit insurance suitable for Europe: Proposal for a three-stage deposit guarantee scheme with limited European liability

Jan Pieter Krahnen Financial Institutions banking union; deposit insurance; bank risk 2013-04

Research Projects on the Banking Union

Category Project Researcher Project Duration Keywords Project ID Publication Count
Financial Institutions

Effect of Capital Regulation on Bank Investment Strategies and Systemic Risk

Rainer Haselmann, Deyan Radev 2016 Capital regulation, Market Risk, Systemic Risk, Bank Investment Strategies, Basel II.5 21121 0
Corporate Finance

The impact of structural reform proposals

Rainer Haselmann, Lara Milione, Tobias Tröger 2016 banking separation, Volcker Rule, ring fencing, Liikanen report, event study 21221 0
Financial Institutions

Bail-In Tracker

Ivelina Dimitrova, Martin Götz, Dominik Hirschbühl, Theresa Kreft, Tobias Tröger, Gerrit Tönningsen 2016 21182 1
Financial Institutions, Systemic Risk Lab

Consequences of Changes in the Banking Structure due to Complex Financial Regulation for Financial Stability and Systemic Risk

Brigitte Haar, Rainer Haselmann, Katharina Pistor, Vikrant Vig, Christine Zulehner 2016 bank regulation, competition law, too big to fail, financial stability 21600 1
Macro Finance

Do Basel III and the Dodd-Frank Act reflect the academic debate on macro-prudential regulation

Mohamed Aldegwy, Suramya Shukla, Matthias Thiemann 2014 11530 1
Financial Institutions, Corporate Finance

Regulatory Arbitrage and Financial Innovation

Matthias Thiemann, Tobias Tröger 2014 1
Financial Institutions, Transparency Lab

Capital Requirements and Bank Lending

Reint Gropp, Thomas Mosk, Steven Ongena, Carlo Wix 2014 banking, bank capital, capital regulation 11129 1
Financial Institutions

Single resolution mechanism

Jens-Hinrich Binder, Theresa Kreft, Tobias Tröger 2014 Single Resolution Mechanism (SRM), Bank Reorganization, Bail in, Single Resolution Fund, Backstops, Banking Union 11135 1
Financial Institutions, Systemic Risk Lab

Basel III and Solvency II - Risks and Side-Effects from their Interplay

Helmut Gründl 2013 11126 1
Financial Institutions

On the Separation of Banking Activities

Jan Pieter Krahnen, Felix Noth, Christian Rauch, Ulrich Schüwer 2013 1

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