Jun 28, 2024

Europe's Banking Union at Ten

Unfinished Yet Transformative

Nicolas Véron

Hosted by Tim Jones

Summary

In 2012, to stave off the collapse of their currency union, Europe’s leaders sought to end the so-called “doom loop” between the solvency of their governments and their banking systems. Two years later, a banking union was born.

Created as a crisis response, like the postwar coal and steel community, this ten-year-old union is another step in Europe’s long integrationist road. Yet – as Nicolas Véron points out in Europe’s Banking Union At Ten: Unfinished Yet Transformative (Bruegel, 2024) - the effort to "break the vicious circle between banks and sovereigns remains fragile and incomplete".

Together with Jean Pisani-Ferry, Nicolas Véron is a co-founder of the Bruegel public-policy think tank in Brussels and a scholar at the Peterson Institute for International Economics (PIIE) in Washington. A specialist in financial systems and regulatory reform, he is an alumnus of the École Polytechnique and the École nationale supérieure des mines in Paris and - until 2000 - was a French civil servant. He has written and co-written many papers on banking supervision, crisis management, and Eurozone policy governance.

*The author's book recommendations were Central Banking Before 1800: A Rehabilitation by Ulrich Bindseil (OUP, 2020) and 7500 Euros: Pastiches politico-littéraires by David Spector (Wombat, 2022).

Tim Gwynn Jones is an economic and political-risk analyst at Medley Advisors, who also writes the twenty4two newsletter on Substack.