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E uropean Deposit Insurance and Resolution in the Banking Union
Author(s) -
Gros Daniel,
Schoenmaker Dirk
Publication year - 2014
Publication title -
jcms: journal of common market studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.54
H-Index - 90
eISSN - 1468-5965
pISSN - 0021-9886
DOI - 10.1111/jcms.12124
Subject(s) - deposit insurance , banking union , incentive , work (physics) , politics , state (computer science) , business , resolution (logic) , financial system , european union , economics , political science , economic policy , market economy , engineering , law , computer science , mechanical engineering , algorithm , artificial intelligence
Since the E uropean Council of June 2012, ‘banking union’ is a key item for the EU 's policy agenda. This contribution outlines the state of the policy debate – identifying the elements that are missing but important from a theoretical viewpoint. Concrete proposals are made as to how the missing elements could be added in the form of a new E uropean Deposit Insurance and Resolution Authority, which would work alongside the ‘single supervisory mechanism’ under which the E uropean Central Bank assumes supervisory powers for the largest eurozone banks. The paper also illustrates how a gradual transition could align incentives and mitigate the political resistance to a full banking union. Finally, new estimates are provided for how much would be needed for a E uropean Deposit Insurance and Resolution Fund.