Corvinus
Corvinus

Should non-euro area countries join the single supervisory mechanism?

Darvas, Zsolt and Wolff, Guntram B. (2013) Should non-euro area countries join the single supervisory mechanism? Working Paper. Department of Mathematical Economics and Economic Analysis, Corvinus University of Budapest, Budapest.

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Abstract

Highlights - Irrespective of the euro crisis, a European banking union makes sense, including for non-euro area countries, because of the extent of European Union financial integration. The Single Supervisory Mechanism (SSM) is the first element of the banking union. - From the point of view of non-euro countries, the draft SSM regulation as amended by the EU Council includes strong safeguards relating to decision-making, accountability, attention to financial stability in small countries and the applicability of national macro-prudential measures. Non-euro countries will also have the right to leave the SSM and thereby exempt themselves from a supervisory decision. - The SSM by itself cannot bring the full benefits of the banking union, but would foster financial integration, improve the supervision of cross-border banks, ensure greater consistency of supervisory practices, increase the quality of supervision, avoid competitive distortions and provide ample supervisory information. - While the decision to join the SSM is made difficult by the uncertainty about other elements of the banking union, including the possible burden sharing, we conclude that non-euro EU members should stand ready to join the SSM and be prepared for the negotiations of the other elements of the banking union.

Item Type:Monograph (Working Paper)
Series Name: Department of Mathematical Economics and Economic Analysis Working Papers
Series Number / Identification Number:2013/05
Uncontrolled Keywords:euro crisis, European banking union, bank supervision, single supervisory mechanism
JEL classification:G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Subjects:Economic policy
International economics
Finance
ID Code:2434
Deposited By: Ádám Hoffmann
Deposited On:02 Aug 2016 07:20
Last Modified:02 Aug 2016 07:21

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