The European Banking Union and the Promise of Financial Stability

Leiden, 21 April 2015

The European Research Centre for Economic and Financial Governance (EURO-CEFG) organizes a seminar on “The European Banking Union and the promise of financial stability.” The Banking Union is a major pillar of the regulatory reaction by the European Union to almost a decade of financial turmoil. The theoretical underpinning of the Banking Union is that an integrated financial market – which is one of the major goals of the European Union – has proven not to be stable in the absence of joint supervision, resolution and deposit insurance of the banks operating in that market. This economic argument is, however, less straightforward than it sounds. Moreover, there are legal and political restrictions to the implementation of a fully-fledged Banking Union in Europe, as shown inter alia by the political unfeasibility of a European deposit insurance scheme and the legal obstacles to a joint banking resolution stemming from national bankruptcy laws.

The goal of this seminar is to tease out the economic, legal, and political shortcomings of the Banking Union as is currently designed and being implemented by the European Union. In this perspective, the seminar asks the broad question whether and how the Banking Union could be improved to support financial stability and sustainable economic growth in the European Union. We have invited three of the most eminent European experts to provide their views on this topic from the standpoints of economics, law and political science. The ambition of the seminar is to stimulate a discussion among these disciplines that arguably will lead to more comprehensive findings than any monodisciplinary approach.

The interdisciplinary approach of this seminar is a reflection of the spirit of EURO-CEFG. By integrating the three perspectives of economics, law and political science in a strategic cooperation between Leiden University, University of Delft and Erasmus University Rotterdam, the Centre strives to investigate the following policy-relevant question: “What governance is needed to support financial stability and sustainable economic growth in the European Union?”

Speakers at this seminar were Professor Martin Hellwig (Max-Planck-Institute for Research on Collective Goods), Professor Eddy Wymeersch (University of Ghent) and Professor Lucia Quaglia (University of York).