Publication

This paper describes 1) the reasons why the EU initiated the process to establish a banking union; 2) the key pieces of legislation that lie at the foundation of this process; and 3) the union's main mechanisms. The author also examines the performance of the union and contends 1) that rapid progress has been made in establishing such union in the EU and in creating mechanisms to create a more robust and resilient banking system; and 2) that as the project is in early stages, it is too soon too determine the extent to which it will be able to succeed in its main goals of i) reversing the further financial fragmentation of European banking system; and ii) breaking the ties between banks and nation states to deal with the risks such links create for both.