Introduction to the special issue: the persistent challenges to European Banking Union

in Journal of European Integration (2023), 45(1), 1-14

The papers of this special issue investigate the persistent challenges to European Banking Union and explore the tensions between broader financial stability objectives and national political and socio ... [more ▼]

The papers of this special issue investigate the persistent challenges to European Banking Union and explore the tensions between broader financial stability objectives and national political and socio-economic pressures through a diversity of lenses. In this introduction, we examine two main issues that need to be addressed in order to strengthen Banking Union: the incomplete institutional design of Banking Union and the difficulties encountered in applying the different elements of Banking Union to loosen sovereign-bank ties. These elements include the so-called ‘single’ rulebook, supervision, resolution, and financial mechanisms to support and resolve banks. [less ▲]

Failing forward in Economic and Monetary Union: explaining weak Eurozone financial support mechanisms

in Journal of European Public Policy (2021), 28(10), 1555-1572

In this article, we apply the ‘failing forward’ approach to analyse the negotiations on and design of reforms to Eurozone economic governance to tackle the Covid-19-related crisis of Economic and Monetary ... [more ▼]

In this article, we apply the ‘failing forward’ approach to analyse the negotiations on and design of reforms to Eurozone economic governance to tackle the Covid-19-related crisis of Economic and Monetary Union (EMU). This crisis highlights both spill-overs from major asymmetries in EMU and weaknesses in the incomplete economic governance of the Eurozone. We focus on the financial support mechanisms agreed upon after intergovernmental negotiations in major crisis situations. These reforms represent compromise solutions that reflect well-entrenched disagreements among member states. We explain why more far-reaching reforms to Eurozone economic governance – notably, the adoption of mutualized Euro-denominated debt and the generalized use of grants over loans – have not been adopted, despite the severity of the Covid-19-related crisis. These reforms – notably the Next Generation European Union (NGEU) financial package adopted in July 2020 – fail to address and, rather, contribute to existing asymmetries, thus sowing the seeds of future crises. [less ▲]

Theoretical Lessons from EMU and Banking Union: Plus ça change

in Howarth, David; Schild, Joachim (Eds.) The Difficult Construction of European Banking Union (2020)

Why did Euro Area member state governments decide to move to Banking Union (BU) — presented by proponents as a crucial move to ‘complete’ Economic and Monetary Union (EMU) — only in 2012, over twenty ... [more ▼]

Why did Euro Area member state governments decide to move to Banking Union (BU) — presented by proponents as a crucial move to ‘complete’ Economic and Monetary Union (EMU) — only in 2012, over twenty years after the adoption of the Maastricht Treaty? Why has a certain design for BU been chosen and some elements of this design prioritised over others? This paper interrogates previous academic accounts on the move to and the design of EMU — neofunctionalist, intergovernmentalist and constructivist — evaluating their explanatory power with reference to BU. It is argued that the asymmetrical design of EMU generated a variety of spill-overs and, hence, a neofunctionalist drive to supranationalise control over bank supervision and financial support for banks as part of the so-called ‘completion’ of EMU. However, intergovernmental negotiations informed by moral hazard and domestic political economy concerns explain the asymmetrical design of BU agreed by national governments. [less ▲]

The policy narratives of European capital markets union

in Journal of European Public Policy (2018), 25(7), 990-1009

This paper examines the ‘making’ of Capital Markets Union (CMU) through the theoretical lens of ‘actor-centred constructivism’, by considering the ‘policy narratives’ that bureaucratic actors have ... [more ▼]

This paper examines the ‘making’ of Capital Markets Union (CMU) through the theoretical lens of ‘actor-centred constructivism’, by considering the ‘policy narratives’ that bureaucratic actors have employed strategically to promote the project. It is argued that two main narratives were articulated by the European Commission in order to mobilize the political support necessary to push forward CMU and reduce potential opposition to it. The first narrative was to boost the size and internal and external competitiveness of European Union capital markets. The second narrative was the increased funding to the real economy, especially to small and medium-sized enterprises (SMEs) and infrastructural projects. The Commission used these narratives instrumentally in ‘framing’ CMU as a positive-sum game, rather than a zero-sum game with potential winners and losers. [less ▲]

The Political Economy of European Banking Union

Book published by Oxford University Press (2016)

The establishment of Banking Union represents a major development in European economic governance and European integration history more generally. Banking Union is also significant because not all ... [more ▼]

The establishment of Banking Union represents a major development in European economic governance and European integration history more generally. Banking Union is also significant because not all European Union (EU) member states have joined, which has increased the trend towards differentiated integration in the EU, posing a major challenge to the EU as a whole and to the opt-out countries. This book is informed by two main empirical questions. Why was Banking Union - presented by proponents as a crucial move to 'complete' Economic and Monetary Union (EMU) - proposed only in 2012, over twenty years after the adoption of the Maastricht Treaty? Why has a certain design for Banking Union been agreed and some elements of this design prioritized over others? A two-step explanation is articulated in this study. First, it explains why euro area member state governments moved to consider Banking Union by building on the concept of the 'financial trilemma', and examining the implications of the single currency for euro area member state banking systems. Second, it explains the design of Banking Union by examining the preferences of member state governments on the core components of Banking Union and developing a comparative political economy analysis focused on the configuration of national banking systems and varying national concern for the moral hazard facing banks and sovereigns created by euro level support mechanisms. [less ▲]

The ComparativePoliticalEconomyofBaselIIIinEurope

in Policy and Society (2016), 35

The Basel III Accord was the centerpiece of the international regulatory response to the global financial crisis, setting new capital requirements for internationally active banks. This paper explains the ... [more ▼]

The Basel III Accord was the centerpiece of the international regulatory response to the global financial crisis, setting new capital requirements for internationally active banks. This paper explains the divergent preferences on Basel III of national regulators in three countries that approximate what are frequently presented as distinct varieties of capitalism in Europe — Germany, the United Kingdom and France. It is argued that national regulators setting post crisis capital requirements had to reconcile three inter-related and potentially conflicting objectives: banking sector stability, the competitiveness of national banks and short to medium term economic growth. The different national preferences on Basel III reflected how different national regulators defined and pursued these objectives, which in turn reflected the structure of national banking systems — specifically, systemic patterns of bank capital and bank-industry ties.     [less ▲]