The European Commission’s detailed proposal for a “banking union” marks an important step toward bringing the Euro crisis under control and securing a sustainable future for Europe.
However, it also underscores just how much still needs to be done and how many political disputes still need to be fought before such a union can be implemented.
Most observers agree that key features of a so-called banking union should include:
- A common deposit guarantee fund
- A single authority to “resolve” banks when they get into trouble
- A common rulebook for banks
- Integrated enforcement of the rulebook and overall supervision of banks
Europe has needed these things for years to make a fully integrated market in financial services truly workable. However, it took the Euro crisis to raise the stakes high enough to overcome the opposition of entrenched interests.