Should the 'Outs' Join the Banking Union?
European Economy 2015.3, 89-112
24 Pages Posted: 10 Mar 2016
Date Written: March 8, 2016
Abstract
The Single Market stimulates cross-border banking throughout the European Union. This paper documents the banking linkages between the 9 ‘outs’ and 19 ‘ins’ of the Banking Union. We find that some of the major banks, based in Sweden and Denmark, have substantial banking claims across the Nordic and Baltic region. We also find large banking claims from banks based in the Banking Union to Central Eastern Europe. These findings indicate that these ‘out’ countries could profit from joining the Banking Union, because it would provide a stable arrangement for managing financial stability. From a political perspective, member states’ opinion on joining the Banking Union ranges from an outright “no” towards considering Banking Union membership.
Keywords: Financial supervision, Banking Union, international banking
JEL Classification: G21, G28
Suggested Citation: Suggested Citation