‘I wouldn’t start from here’: the making of European Banking Supervision, and the road ahead

The Royal Institute for International Relations is an independent think-tank based in Brussels. Its interdisciplinary research is conducted in a spirit of total academic freedom. Drawing on the expertise of its own research fellows, as well as that of external specialists, both Belgian and foreign, it provides analysis and policy options that are meant to be as operational as possible.When eurozone leaders committed themselves in June 2012 to creating a single supervisory mechanism, now also known as European banking supervision, few in Europe realised the magnitude of the project. Since then, raising banking supervision to the European level has proven to be one of Europe’s most ambitious projects of the last decades. Significant legal challenges resulted from the fact that European banking supervision had to be set up with clear-cut design choices in mind, yet without changing the EU Treaties. What's more, the eurozone’s sovereign debt crisis injected a sense of urgency into the project.

This Egmont Paper argues that, even with all the caveats in mind, the EU largely succeeded in meeting the ambitions that eurozone leaders set out back in 2012. But a lot of difficult (yet indispensable) work still lay ahead. Nonetheless, the SSM offered a good basis for a European banking union that could contribute to a healthier and more stable financial sector – ultimately also benefiting the wider economy.

• Primary Source

ESO: Key Source: Banking supervision http://www.europeansources.info/record/banking-supervision/

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